Strategy co-founder and executive chairman Michael Saylor said bitcoin needs a “disciplined expansion” across banks, corporates, securities, credit and capital markets, paving the way for the asset in the form of spot exchange fund (ETF) outflows and a broader test of a sell-off in institutional demand.
Friday, Saylor published an essay that argued that Bitcoin’s base layer should be treated as “sacred infrastructure”, with most innovation occurring in the upper layers, applications, custody systems, credit facilities, and financial infrastructure.
Comments describe Bitcoin’s next phase as a collision of two institutional channels: passive exposure to spot ETFs, which has expanded access but remains sensitive to redemptions, and the corporate and credit adoption model favored by Saylor’s strategy.
Saylor argued that Bitcoin should be embedded in the financial machine and not rely solely on spot buyers or ETF proceeds. He said Bitcoin’s future requires balancing adoption, innovation and self-reliance while maintaining the network’s core properties.
The essay comes amid a keen sell-off in the Bitcoin market that has put pressure on both major institutional channels. Spot Bitcoin ETF sent weekly net outflows of $1.42 billion, $1.26 billion and $1 billion in the last three weeks of May, while outflows in the current week have so far reached $1.4 billion.
Strategy also recently sold 32 Bitcoin to fund preferred stock dividends, marking its first sale since 2022, challenging the “never sell” narrative that has long surrounded Saylor’s corporate Bitcoin strategy.
Spot Bitcoin ETF inflows and outflows over the last four weeks. Source: SoSoValue
Analysts divided on demand reset
The pressure has heightened a broader debate over whether Bitcoin’s recent decline is a momentary reset from excessive leverage or a sign of waning institutional demand after months of ETF-led buying.
Lacie Zhang, research analyst at Bitget Wallet, said Bitcoin may already be closer to settling the episode than stock markets after a $1.8 billion wave of liquidations, deeply negative funding rates and a keen reset in open interest positions. Zhang said a retest from $55,000 to $57,000 is still possible if outflows continue. She added:
“The key question is not just whether BTC holds $63,000, but whether ETF flows will stabilize, foreign exchange reserves will continue to decline, and whale accumulation will increase.”
Nicolai Sondergaard, a research analyst at Nansen, offered a more cautious view, saying exchange flow data suggests participants are taking advantage of Bitcoin’s rebound from around $61,000 to reduce exposure rather than boost positions.
Sondergaard said the demand narrative for Bitcoin ETFs has been developing since May and that a sustained recovery will require more than just the removal of immediate market pressures. He said that without a observable re-entry into the market from institutional buyers, the market may struggle to regain momentum.
Related: The Bitcoin model used by the strategy passed its first stress test: the gray scale
Saylor advocates for Bitcoin beyond ETFs
In his essay, Saylor described four broad ideologies of Bitcoin: maximalists, capitalists, technologists and fundamentalists. He said each group protects something vital, but each group can also go too far if its view becomes absolute.
The “disciplined expansion” thesis most closely aligns with a capitalist view that views Bitcoin as digital capital that can be integrated into balance sheets, securities, credit markets, banks, brokers, insurers, and asset managers.
This framework differs from ETF-based exposure, where institutional adoption is primarily measured by inflows and outflows.
Saylor’s preferred channel points to a more embedded model in which Bitcoin is used in corporate treasuries, collateral structures and capital markets, rather than held solely through spot investment products.
Strategy’s BTC holdings compared to USD value. Source: BitcoinTreasuries.net
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