Institutions Won't Stop Buying Crypto. Retail Investors Can't Stop Selling. Who's Right?

Bitcoin is sitting at $68,000. Down 21% on the year. The Fear and Greed Index reads 41. Memecoins are bleeding. Retail traders are panic selling into every bounce.

And yet, right now, some of the biggest money in the world is quietly backing up the truck.

Strategy just bought another $168 million in bitcoin. BitMine dropped $90 million on ethereum in a single week. An Italian bank with $900 billion in assets just disclosed $100 million in bitcoin ETF holdings. These aren't dumb money moves. These are calculated bets being placed while everyone else runs for the exit.

So what's actually going on?

The Sentiment Paradox

Tom Lee, chairman of BitMine and probably the most consistently bullish voice in institutional crypto, said something interesting this week. He compared current market sentiment to "the forlornness and dejection seen at the November 2022 lows and depths of 2018 crypto winter."

That's a bold comparison. November 2022 was the month FTX collapsed. The entire industry looked dead. And 2018? That was the kind of bear market that made people uninstall their portfolio trackers and pretend they never owned a Ripple token.

But here's the catch. Lee also pointed out something different about this downturn. There haven't been any major collapses. No exchange blowups. No stablecoin depegs. No lender going belly up. The vibe is terrible, but the infrastructure is fine.

I think that distinction matters more than most people realize. Bad sentiment during a real crisis means the market has structural problems. Bad sentiment without a crisis? That's just fear. And fear, historically, has been the best buying signal in crypto.

Strategy: Buying At A Loss And Not Caring

Michael Saylor's Strategy now holds 717,131 bitcoin. They paid an average of $76,027 per coin. Bitcoin trades at $68,000. That's roughly $5.7 billion in paper losses. The stock is down 60% year over year.

And they bought more last week anyway.

That's either conviction or insanity, depending on your time horizon. But Saylor has been playing this game long enough that we should probably take his actions seriously. The company funded its latest purchase through common stock sales and its new STRC preferred series. They're not burying themselves in debt. They're raising capital specifically to buy bitcoin cheaper than their average cost basis.

Think about that for a second. Every coin they buy at $68K actually improves their average. They're dollar cost averaging with corporate treasury money while retail is selling at a loss.

Bitmine: The Ethereum Whale You Didn't Know Existed

Most people don't realize BitMine owns 3.62% of all ethereum in existence. Let that number sit with you. One company controls almost 4% of the second largest cryptocurrency.

Last week they added 45,759 ETH worth $90 million. It was their biggest weekly purchase of the year in token terms. Their total stash is now 4.37 million tokens. They've staked over 3 million of those, pulling in $176 million per year in staking rewards.

The company has about $8 billion in paper losses on its ethereum position. And they're still buying. Aggressively.

Tom Lee made the case that "the price of ETH is not reflective of the high utility of ETH and its role as the future of finance." You can agree or disagree with that thesis. But you can't ignore that someone is willing to risk billions on it.

European Banks Are Joining The Party

Here's a detail that didn't get enough attention today. Intesa Sanpaolo, one of Italy's largest banks, disclosed $96 million in bitcoin ETF holdings. They hold positions in both the ARK 21Shares Bitcoin ETF and the iShares Bitcoin Trust.

But it gets more interesting. They also hold a large put option on Strategy stock. That's a hedge. They're long bitcoin through ETFs while betting that Strategy's stock premium over its actual bitcoin value will compress. It's a sophisticated trade. Not something you'd expect from a European bank filing.

They also have positions in Coinbase, Robinhood, BitMine, and even a $4.3 million stake in the Bitwise Solana Staking ETF.

This isn't experimental anymore. This is portfolio allocation. When a bank with nearly a trillion dollars in assets starts building a multi-layered crypto position, that's not a hobby. That's a strategy.

The Dollar Problem Nobody Wants To Talk About

Bank of America's February survey dropped some numbers worth paying attention to. Investor positioning against the U.S. dollar has hit its most negative level since 2012. Over a decade of bearish records.

Normally that's great for bitcoin. Weak dollar means risk assets go up. Crypto has historically been the best performing asset class during dollar weakness.

But something weird is happening. Since early 2025, bitcoin and the dollar have been moving together. Their 90 day correlation hit 0.60 this week. That's high. It means that when the dollar falls, bitcoin falls too. That's not supposed to happen.

So we're in a strange spot. If the crowded dollar short trade unwinds and the buck bounces, bitcoin might actually rally with it. If the dollar keeps falling, bitcoin could fall further. The old playbooks aren't working right now.

What The Data Actually Says

Let's lay out the numbers:

Bitcoin at $68,000. Down 21% year to date.

Fear and Greed Index at 41. That's "Fear."

Spot bitcoin ETFs have seen $678 million in outflows this month. Three straight months of redemptions.

30 day implied volatility dropped from 100% back to 52%. The panic is fading, but so is the enthusiasm.

Funding rates are barely positive. Nobody is piling on exposure.

CPI fell to 2.4% year over year in January. Real yields hit 1.8%, the lowest since December.

Gold pulled back from $5,600 to $4,928 after a 21.5% correction. Even the safe havens are taking hits.

So Who's Right?

I think the institutions are closer to correct here. Not because they're always right. They're not. But because the macro setup is quietly improving while sentiment is still stuck in doom mode.

Inflation is cooling. Real yields are falling. The Fed is likely cutting rates this year. The dollar is weak. All of those things should eventually push capital into risk assets.

And the crypto industry itself is structurally healthier than it was during previous downturns. No major blowups. No contagion. Just a market that got overextended on borrowed money, corrected hard, and hasn't found a reason to get excited again.

The gap between institutional action and retail sentiment is the story. When the biggest players in the room are buying while everyone else is scared, it usually means we're closer to a bottom than a top.

It doesn't mean the bottom is today. Bitcoin could easily drift to $60K again. Maybe lower. But the people with the most capital and the longest time horizons are making their bets very clear.

Whether you follow them is up to you.