Institutional Crypto Inflows Surge 35% to $35 Billion

Institutional investors have demonstrated a substantial increase in their interest in cryptocurrency assets, with a remarkable inflow of $35 billion into the crypto market. This surge in investment underscores a growing institutional confidence in digital assets, which could potentially drive a significant rally in the crypto market. The inflow of funds into cryptocurrencies indicates the increasing acceptance and trust that institutional investors have in these assets. This trend is particularly evident in the performance of BlackRock’s iShares Bitcoin Trust (IBIT), which recently broke its 20-day inflow streak. Despite this pause, IBIT has seen substantial inflows over the past month, with notable days including a $970 million inflow on April 28 and a $674 million inflow on May 2. These figures highlight the continued institutional appetite for Bitcoin exposure, even amidst broader market fluctuations.

The halt in IBIT flows, which ended on May 13, marks the fund’s first zero-flow day since April 14. This pause comes amidst a broader pullback from spot Bitcoin ETFs, with cumulative outflows of $96.14 million recorded on that day. Despite these outflows, IBIT remains the dominant spot Bitcoin ETF by net assets, managing over $65 billion and controlling more than 3% of BTC’s circulating supply. Year-to-date, IBIT’s inflows exceed $7 billion, outperforming traditional funds like SPDR Gold Shares (GLD), which brought in around $6.5 billion in the same period.

The recent rally in the crypto market, which pushed the aggregate market cap above the $3.5 trillion mark, has further bolstered institutional interest in digital assets. This rally is driven by a combination of factors, including the increasing acceptance of cryptocurrencies as a legitimate asset class and the growing recognition of their potential as a store of value and a medium of exchange. The $35 billion inflow into crypto assets is a testament to the growing institutional appetite for these assets, which could potentially lead to a major rally in the crypto market. According to analysts' forecasts, this trend is likely to continue as more institutional investors seek to diversify their portfolios and gain exposure to the crypto market.

On-chain data shows a surge in investment in the last three weeks following the White House’s pause on country-based tariffs. Crypto enthusiast Ali Martinez wrote on X that total market inflows surpassed $35 billion, signaling a fresh wave of growth. This comes after flat movements from most crypto assets, underscored by the price dip. In the same period, crypto funds flipped outflows recording billions in new flows. Last week, traders saw $882 million inflows taking total yearly numbers above $6.7 billion. A significant milestone was spot Bitcoin ETFs accumulating over $62.9 billion since approval in the United States. These funds reshaped institutional dominance in crypto assets.

Bitcoin dominated inflows, attracting US$867m globally last week. It also reached a new milestone, as US-listed ETFs recorded cumulative net inflows of US$62.9bn since their launch in January 2024, surpassing the previous high of US$61.6bn set in early February. Crypto whales have also become mega bullish on Bitcoin with recent purchases and centralized exchange outflows. Over the past month, Binance whale address balances dropped from $5 billion to $3 billion. In contrast, retail volumes spiked, with traders doubling down on profit taking. Digital asset analyst Darkfrost explained that this shift in sentiments shows bulls’ projections of the market direction.

Bulls have set their sights on a new price run after Bitcoin regained the $100k mark, which had a lingering effect on altcoin prices. This is hinged on a positive outlook from global institutional and market players. Major partnerships fuel institutional demand, attracting more capital. In return, crypto prices record major growth, particularly Bitcoin and top altcoins. The market direction can be gauged by using BTC miners’ reserves. On-chain data shows miners have halted asset sales since the recent price surge. Most market analysts saw this as an extremely bullish sign for the asset.