A claim has been raised that sovereign wealth funds have recently been accumulating spot bitcoin (BTC). An analysis said retail investors' participation is slowing, but institutional and corporate funds see current prices as a long-term investment opportunity.

On June 30 (local time), blockchain media outlet Cointelegraph reported that Basil Al Askari (바실 알 아스카리), chief executive of MidChains, said at least one sovereign wealth fund is currently accumulating spot bitcoin and as many as two could be confirmed in the coming weeks.

Al Askari recently appeared on a Cointelegraph podcast and said retail participation in the market is falling, while moves by institutional and corporate investors are the opposite. "At least one sovereign wealth fund is accumulating spot bitcoin, and we could confirm up to two in the next few weeks," he said.

Sovereign wealth funds are state-owned investment funds that manage national assets, and differ from typical private investors. Cointelegraph assessed their market entry as highly symbolic, given global sovereign wealth funds manage more than $13 trillion in assets.

Al Askari runs MidChains, a regulated crypto exchange platform headquartered in Abu Dhabi. He said current prices are effectively being accepted as a long-term entry level by large institutional investors. He also said ultra-large investors able to buy in tranches over a long period are using the recent pullback as an accumulation opportunity.

He said buying by sovereign wealth funds is unlikely to lead to a sharp jump in bitcoin prices in the short term. Instead, he stressed that the fact sovereign wealth funds have entered the market itself could send a strong signal to other institutional investors. He said other institutions could look to sovereign wealth funds as a leading indicator and seek ways to enter the bitcoin market.

Cases of bitcoin investments by Middle Eastern sovereign capital have already been confirmed. Abu Dhabi sovereign wealth fund Mubadala Investment Company invested about $437 million last February through BlackRock's spot bitcoin ETF, iShares Bitcoin Trust (IBIT). Bhutan's Druk Holding and Investments (DHI) is also cited as a representative sovereign-type investment institution that directly holds bitcoin, but it is known to have sold some of its holdings this year.

Institutional buying has also continued. John D'Agostino, head of institutional strategy at Coinbase, said in an interview with CNBC early this month that family offices, the government and sovereign wealth funds in the United Arab Emirates (UAE) see current prices as a bargain-buying opportunity and are reviewing expanded bitcoin investment.

Market fund flows are somewhat mixed. U.S. spot bitcoin ETFs have seen cumulative outflows of more than $4.1 billion so far this month. Corporate bitcoin purchases, however, are continuing. Strategy, the world's largest corporate bitcoin holder, bought an additional 3,657 BTC this month alone.

The industry analyses that the market is unfolding in a phase where ETF outflows and accumulation by institutions and companies are happening at the same time. If it is confirmed that sovereign wealth funds have also begun accumulating spot bitcoin in earnest, it could be seen as a signal that the institutional investment base is expanding further, separate from short-term price moves.

The market is watching whether additional confirmation will emerge of actual accumulation by sovereign wealth funds and whether that would lead to continued inflows from other large institutional investors.