CryptoQuant: Funds Adopt Dual-Reserve Model with USD Buffer and Hedging, Reducing Forced BTC Sales
CryptoQuant reports that a major fund strategy has shifted to a Dual Reserve Model, holding both USD and Bitcoin reserves and introducing a 24-month USD buffer. The move acknowledges a non-zero risk of a prolonged Bitcoin pullback or sideways trading, and reduces reliance on stock issuance to finance BTC purchases. Management now treats Bitcoin as a managed asset, using cash buffers, hedges and selective liquidation to protect reserves and lower the probability of forced sales during downturns. CryptoQuant warns that reduced marginal buying pressure may weigh on near-term momentum, but the enhanced liquidity and hedging toolkit is intended to improve long-term market stability. Key themes: Dual Reserve Model, USD buffer (24 months), hedging, lower forced-sale risk, lower near-term accumulation pressure.
Neutral
The shift to a Dual Reserve Model with a 24-month USD buffer is a stabilizing, risk-management move that reduces the chance of forced BTC sales in downturns — a structurally positive change for market resilience. However, it also signals reduced marginal buying from this strategy (less stock-financed accumulation), which can remove a notable source of demand and weigh on near-term price momentum. Historically, institutional moves to de-risk (cash buffers and hedges) have tempered volatility but sometimes reduced upward pressure — e.g., when funds shifted from aggressive accumulation to risk-managed allocations after sharp market corrections. Short-term impact: likely muted bullishness or sideways trading as buying pressure softens and hedging activity may add volatility. Long-term impact: more stable market structure and lower tail risk as institutions prioritize reserve protection, which is constructive for institutional inflows over time. Overall, effects balance out to neutral — downside risk from forced selling is reduced while immediate demand is likely weaker.