Psychology Is Still Costing Retail Investors Bitcoin

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We have spent the last two Morning Notes dissecting the psychology of the everyday investor across all phases of the market cycle. One critical element we had not yet addressed is the structural shift in Bitcoin ownership that occurs throughout these cycles.

2025 was a tale of two halves for Bitcoin. Euphoric highs and strong bullish momentum defined the early part of the year, before a sharp bear phase emerged towards the back end. Sentiment shifted quickly, and so did ownership.

2024 marked the true institutional arrival. Following the ETF launches and a growing number of companies adopting Bitcoin on their balance sheets, large entities began accumulating aggressively. While 2024 finished green overall, it also included a prolonged six month consolidation that frustrated and eventually shook out many retail participants.

In 2025, that transfer of ownership accelerated.

Source: https://river.com/

A recent River report shows that 2025 saw more Bitcoin sold by individuals than in 2024, despite price reaching higher all time highs. In total, 696,000 BTC left the hands of individual investors throughout 2025.

Those coins did not vanish. They were absorbed by governments, funds, ETFs, and businesses. While retail participants capitulated into volatility, institutions accumulated into weakness.

This matters.

Cycles are not just about price action. They are about who owns the asset. When Bitcoin moves from short term, emotionally driven holders to long term, capital rich entities, the supply dynamics change. Coins held by institutions and sovereign actors are less likely to be traded on short term noise. They are strategic allocations, not speculative punts.

Every major Bitcoin cycle has involved a redistribution phase. Weak hands sell into fear. Stronger hands accumulate quietly. When the next expansion phase begins, available liquid supply is tighter than before.

That is how structural uptrends are built.

Retail often focuses on calling tops and bottoms. Institutions focus on allocation and time horizon. One is attempting precision. The other is building position.

Psychology determines who sells. Conviction and capital determine who accumulates.

Over time, ownership concentration tells its own story. And history suggests that being aligned with long term conviction rather than short term emotion has been the more rewarding side of the trade.

Tariff Update: The Verdict is In

Last month we covered the upcoming US Supreme Court ruling on President Trump’s tariffs, with prediction markets pricing just a 35% chance of the courts siding with him. Over the weekend, the verdict arrived and the tariffs were deemed illegal. However, Trump quickly doubled down, first announcing new 10% global tariffs before raising them to 15%. The legal battle may be settled for now, but trade uncertainty is clearly not.

Stormrake Spotlight: Pax Gold (PAXG) ($5,158)

Source:https://www.tradingview.com/x/PJnYdoed/

PAXG closed last week strongly with five consecutive green daily candles and now appears to be breaking out of its consolidation range. If this breakout sustains, a move back towards the prior upside supply zone near the all time highs becomes increasingly likely. Momentum has shifted in favour of bulls, particularly as policy instability rises.

BTC/USD Key Levels and Price Action:

Source:https://www.tradingview.com/x/C4BXxKZp/

Bitcoin has spent over two weeks trapped between $66.8k and $70k. Both sides have attempted breakouts, but neither has delivered follow through. Until we see a decisive close outside this range, consolidation remains the dominant structure. A breakdown targets $60k as major support, while a sustained breakout opens the path towards $80k. The longer price compresses here, the more significant the eventual expansion is likely to be.

BTC Total ETF Flows for 22 Feb: (data not availabale at the time of writing)

(ETF flow data is sourced from https://farside.co.uk/btc/ and reflects figures at the time of writing.)

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*All prices are denominated in USD unless stated otherwise*

Written by Alexandar Artis and James Ryan

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