Key Takeaways:
- Spot Bitcoin ETFs brought in $2.75 billion this week, nearly 4.5x the prior week’s inflows.
- Institutional players, led by BlackRock’s IBIT and firms like Strategy, are driving the rally while retail participation remains muted.
- Despite record inflows and price gains, on-chain metrics suggest Bitcoin’s current run is not yet overheated.
US spot Bitcoin exchange-traded funds (ETFs) have recorded a surge in demand, pulling in $2.75 billion in inflows this week as Bitcoin broke past its January all-time high of $109,000 and touched a new peak of $111,970.
The figure represents a nearly 4.5x increase over the previous week’s $608 million inflow, according to data from Farside.
On May 23 alone, ETFs attracted $211.7 million in net inflows, with BlackRock’s iShares Bitcoin Trust (IBIT) leading the pack by adding $430.8 million—marking its eighth straight day of net gains.
BlackRock Continues to Dominate ETF Inflows
While BlackRock continues to dominate ETF inflows, Grayscale’s GBTC shed $89.2 million, followed by ARK 21Shares’ ARKB with $73.9 million in outflows.
This spike in inflows comes amid heightened Bitcoin activity. On May 21, the same day Bitcoin crossed $109,000, ETFs saw $607.1 million in inflows.
The upward momentum pushed Bitcoin to a new all-time high the next day, though the price has since experienced a mild pullback.
The Crypto Fear & Greed Index, which tracks overall sentiment, dropped from an “Extreme Greed” reading of 78 to 66 in the past 24 hours, reflecting more cautious market behavior despite record prices.
Notably, May could break the monthly ETF inflow record of $6.49 billion set in November 2024. With five trading days left, spot Bitcoin ETFs have already drawn $5.39 billion.
Analysts remain optimistic. On-chain data suggests the rally is not yet overheated.
CryptoQuant’s Crypto Dan noted that funding rates and short-term capital inflows remain low, and profit-taking from short-term investors is minimal — signs that BTC’s upward trajectory may have more room to run.
Institutions Take the Wheel in Bitcoin Rally
The current bull market is being driven primarily by institutional capital rather than the wave of individual buyers seen in past cycles, according to a recent report from Matrixport.
“This rally is unfolding largely without retail participation,” analysts wrote. “Instead of the usual buzz and euphoria, there’s a noticeable absence of retail momentum.”
Matrixport said there has been a clear shift in Bitcoin’s market dynamics.
In previous bull runs, individual investors often led the charge, with social media hype and FOMO fueling rapid price gains.
But this time, large institutions, motivated by Bitcoin’s role as a hedge against inflation, are steering the market.
“We’re witnessing a steady and quiet transfer of Bitcoin from early adopters, miners, and exchanges to a new class of investors, primarily corporations,” the report noted.
Among those leading the institutional push is Strategy, the largest corporate holder of Bitcoin.
According to Bitcoin Treasuries data, 204 institutions currently hold BTC, with more than half being public companies.
In just the last month, 11 new firms added Bitcoin to their balance sheets.
Strategy recently announced a plan to raise $2.1 billion through Series A Perpetual Preferred Stock, with proceeds potentially going toward further BTC acquisitions.
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