Bitcoin Faces Demand Decline Despite Musk’s Political Support

Bitcoin is currently trading near $109,000, but there are signs of weakening demand. Institutional purchases by firms and inflows into Bitcoin Exchange-Traded Funds (ETFs) have slowed significantly in recent weeks. Despite this, Tesla CEO Elon Musk has launched the America Party, a new political initiative that openly supports Bitcoin, giving the cryptocurrency fresh political visibility. However, analysts note that declining spot demand and limited retail participation continue to weigh on price performance.

Bitcoin has seen a 0.8% rise over the past week and a 4.5% gain over the last month. Yet, even with steady institutional interest and a favorable macro backdrop, the world’s largest digital asset remains stuck in a consolidation range. This has left many market watchers questioning what it will take to reignite a meaningful rally.

Despite prominent institutional moves, including Michael Saylor’s Strategy continuing to accumulate BTC and sustained inflows into Bitcoin ETFs, a new report reveals a stark disconnect between institutional buying and overall market demand. ETFs and MSTR purchases are a portion of Bitcoin demand, but overall demand contraction is more than offsetting these purchases. The acceleration of overall demand growth is what drives price rallies.

Over the past 30 days, demand for BTC has contracted by approximately 895,000 coins. This drop dwarfs the combined impact of institutional purchases, which have slowed significantly compared to their December highs. At the end of last year, ETFs absorbed 86,000 BTC and MSTR bought 171,000. In stark contrast, ETFs purchased just 40,000 BTC last month, while MSTR’s acquisitions fell to a mere 16,000 BTC. The state of Bitcoin’s mempool — the waiting room for unconfirmed transactions — is nearly empty, a strong indicator that retail spot demand is drying up. This suggests that price action is being driven almost entirely by institutions, and with even those flows declining, the upward momentum for BTC appears increasingly unsustainable without fresh demand catalysts.

The Bitcoin treasury strategy, once a trending narrative with companies emulating Strategy’s aggressive approach, is also coming under scrutiny. SkyBridge Capital founder Anthony Scaramucci warned that the replicative BTC-on-the-balance-sheet model is likely to fade. He clarified that Saylor’s case is unique due to the diversified nature of Strategy’s Bitcoin-linked financial products. However, for newer entrants trying to follow the same playbook, the outlook may not be as promising. Scaramucci urged caution despite his bullishness on Bitcoin overall.

Amid the subdued sentiment, Standard Chartered remains one of the few steadfast bulls in the room. The bank continues to project a $200,000 BTC price target, expressing confidence that the long-term fundamentals of the cryptocurrency remain intact despite current headwinds. This forecast hinges on a belief that regulatory clarity, institutional adoption, and macroeconomic shifts — including a weakening dollar and growing de-dollarization — will eventually act as tailwinds for Bitcoin’s price.

For now, Bitcoin is locked in a prolonged consolidation phase with no immediate catalyst in sight. The market appears to be in a holding pattern, waiting either for renewed retail enthusiasm or for a significant macro or technological event that could breathe life back into demand. If institutional purchases continue to slow, and retail remains largely absent, Bitcoin may struggle to maintain its current price level, let alone break past its all-time highs. Still, with the next Bitcoin halving less than a year away and global capital markets watching crypto more closely than ever, many believe that BTC’s quiet phase could be the calm before the next major storm.

Musk’s announcement came just days after a high-profile public feud with former ally Donald Trump over the recently passed $3.4 trillion “Big, Beautiful Bill” — a sweeping spending package Musk called a “disgusting abomination” for its impact on the federal deficit. Now, with the launch of the America Party, the SpaceX and Tesla CEO is calling for a reset of both the political and monetary systems — and Bitcoin is firmly in his vision for the future. Musk confirmed the America Party’s pro-Bitcoin stance, stating that “Fiat is hopeless, so yes.” This statement reverberated through both political and crypto circles alike. The comment adds another layer to Musk’s long-running relationship with cryptocurrencies, which has included Tesla’s brief acceptance of Bitcoin for payments and Musk’s public support of Dogecoin. Now, it appears Bitcoin could be a core part of his vision for a new American political and financial future.

In his announcement, Musk said the America Party was born from frustration with a political establishment he believes has become indistinguishable, especially when it comes to reckless spending. The America Party’s launch comes just a week after Trump signed the controversial “Big, Beautiful Bill” into law — a move Musk vocally opposed. The bill’s $3.4 trillion spending plan sparked fury from fiscal conservatives and libertarians, many of whom saw Musk’s criticism as a call to action. Trump, for his part, dismissed Musk’s movement as a fantasy. But Musk is betting that history can change. In recent years, public disillusionment with the Republican and Democratic parties has grown, and a 2024 poll found that 62% of Americans believe a third party is needed. The America Party is already drawing attention from other prominent figures, including Mark Cuban and Anthony Scaramucci, who are said to be exploring involvement with Musk’s initiative. While the America Party has not yet filed with the Federal Election Commission, it has already launched an official website and begun attracting early supporters. Musk has not provided a formal platform, but early messaging suggests a strong emphasis on monetary reform, decentralization, and reducing federal bloat — themes that resonate deeply with Bitcoin’s ideological base.

By backing Bitcoin, Musk is not just endorsing a currency — he’s signaling a rebellion against the traditional monetary system, which he argues is corrupted by inflation and centralized control. Bitcoin, with its fixed supply and decentralized nature, aligns with the America Party’s broader message of freedom from institutional excess and political graft. This move could attract a new class of crypto-native voters — especially younger Americans disillusioned by the status quo. With blockchain and financial sovereignty becoming increasingly politicized, the America Party could turn Bitcoin into a cornerstone of its identity. Despite the buzz, political analysts remain skeptical of the America Party’s viability. Third-party efforts have historically failed due to institutional roadblocks, voter polarization, and the winner-takes-all electoral system. Yet Musk’s reach is undeniably vast. With over 180 million followers and a loyal fanbase spanning tech, finance, and crypto, even a fringe third-party campaign could shape national conversations — particularly in battleground states where margins are slim. And if nothing else, Musk’s declaration of support for Bitcoin marks a pivotal moment in the political acceptance of digital assets.

Elon Musk’s America Party may still be in its infancy, but its potential impact is already stirring debate in both political and financial arenas. With a core message of fiscal responsibility, decentralization, and freedom — underpinned by support for Bitcoin — Musk is planting a flag for a new kind of political and monetary future. Whether the America Party becomes a serious contender or simply a high-profile protest against the status quo, one thing is clear: Bitcoin is no longer just a financial asset — it’s becoming a political symbol.