Markets Brush Off $9 bn BTC Transfer; ETH ETF Flows Signal Institutional shift

Ayush Tripathi Research Analyst

Max Shannon Senior Research Associate

Overview

Chart of the Week
Performance
Sentiment
Fund Flows
On-Chain
Futures, Options & Perpetuals
Bottom Line
Appendix

Bitcoin rose +0.37% last week despite a $9bn Satoshi-era wallet transfer, as markets absorbed the shock with little volatility. Exchange balances fell to 14.5% of supply, while ETH, BNB, SOL, and SUI outperformed, signalling the early stages of an altcoin rotation.
Our Cryptoasset Sentiment Index remains bullish with 10 of 15 indicators above trend. Altcoin breadth widened, performance dispersion increased, and ETH outperformance pointed to rising risk appetite and loosening Bitcoin correlation.
Chart of the Week: Ethereum Spot ETFs saw $1.56bn in inflows vs. $1.40bn in BTC outflows—marking a rare ETH/BTC flow divergence. With 27% of ETH ETF AUM now composed of new inflows and $155.6mn also entering altcoin ETPs, institutional rotation appears firmly underway.

Chart of the Week

Performance

Crypto markets traded in line with broader risk assets last week, brushing off what would typically be a major headwind: the sale of 80,000 bitcoin-worth over $9 bn-by a Satoshi-era wallet. Historically, such large redistributions (e.g., Mt. Gox) have weighed on sentiment.

But this time was different. BTC ended the week up 37bps, with Bitcoin Dominance ticking up 30bps as well, suggesting that the market simply shrugged it off in the face of strong structural tailwinds.

One of those tailwinds continues to be the long-term decline in exchange balances. Only just 14.5% of total supply, 2.88 mn, is held on exchanges. This has been in a downtrend since August 2024 despite breaking through All Time Highs and is now at the lowest level since November 2020.

With less supply readily available to sell, the market remains positioned for a continued “supply shock” narrative.

Yet, Bitcoin's unremarkable gains this past week have shed light on what seems to be the start of the altcoin season.

Our Chart-of-the-Week tells the story: $1.403 mn exited Bitcoin ETPs and funds, while Ethereum posted $1.557 bn in inflows-on top of $2.1 bn the prior week. Such pronounced flow divergence occurs infrequently and could signal a meaningful shift in investor preferences.

For example, institutional interest in Ethereum appears to be re-accelerating. ETH ETFs have now absorbed inflows equal to 27% of assets under management-whereas BTC's flows as a percentage of AUM remained flat-suggesting a meaningful rotation underway.

This altcoin trend is also showing up in corporate treasury strategies. Broader ex-ETH altcoin flows last week totalled another $155.6 mn.

When looking at the first four publicly traded U.S. firms holding ETH have posted a median treasury holding premium of 1.28x.

The largest ETH treasury comes from The Ether Machine–Dynamix Corp SPAC merger underscores that thesis, launching with 400,000 ETH on balance sheet (worth $1.55 bn at current prices), now accounting for nearly half of the total ETH held by all public companies globally.

That same momentum appears to be cascading into the rest of the altcoin market.

MEI Pharma is committing $100 mn to a Litecoin-centered treasury strategy, with Litecoin founder Charlie Lee joining the board.
Ethena's governance token ENA will be the focal point of TGLY Acquisition Corp's $360 mn PIPE strategy.
Bit Origin is raising $500 million in stock and debt to add Dogecoin to its treasury.
Windtree has secured a $500 million equity credit line to accumulate BNB, with Kraken tapped for custody.

This cross-chain treasury diversification push feels increasingly like a theme-not a one-off.

On the macro front, US economic data last week underwhelmed: the Conference Board's Leading Economic Index missed expectations for the sixth time in seven months, Redbook year-over-year retail sales disappointed, and durable goods orders collapsed by 1.5pp below consensus.

Labor markets, however, continue to defy gravity. Initial and continuing jobless claims both beat forecasts, suggesting resilience beneath the surface and giving Chair Powell an excuse to pause.

This in fact has been leading to a rift in the Federal Reserve. For the first time in over three decades, we could see a double dissent among Board members.

Powell now faces pressure from both sides: a fragmented committee internally, who have been pushing rate cuts and disinflation continues despite tariff-and-labour market-induced pressures, and mounting political pressure externally, particularly from President Trump, who has been vocally advocating for rate cuts.

Bitcoin-long sensitive to rate expectations and institutional autonomy-could react strongly if this dissent materializes, especially if it's perceived as a response to political interference.

With internal Fed discord and external pressure converging, as well as tariff-deal risks, have the potential to increase volatility across risk assets, crypto included.

In general, among the top 10 crypto assets SUI, BNB, and Solana were the relative outperformers.

Overall altcoin outperformance vis-à-vis bitcoin has accelerated last week, with 50% of our tracked altcoins managing to outperform bitcoin on a weekly basis. Ethereum also managed to outperform bitcoin last week.

Sentiment

Our in-house “Cryptoasset Sentiment Index” continues to signal a bullish sentiment.

At the moment, 10 out of 15 indicators are above their short-term trend.

Our Crypto Dispersion Index and BTC Funding Rate showed positive movements.

The Crypto Fear & Greed Index continues to signal a “Greed” level of sentiment as of this morning.

Performance dispersion among cryptoassets has started to pick up last week, signalling that altcoins have started to be slightly less correlated with the performance of bitcoin.

Altcoin outperformance vis-à-vis Bitcoin has increased from last week, with around 50% of our tracked altcoins managing to outperform Bitcoin on a weekly basis. Ethereum also managed to outperform Bitcoin last week.

In general, increasing (decreasing) altcoin outperformance tends to be a sign of increasing (decreasing) risk appetite within cryptoasset markets and the latest altcoin outperformance signals an increasing risk appetite at the moment.

Sentiment in traditional financial markets as measured by our in-house measure of Cross Asset Risk Appetite (CARA) has slightly decreased, moving from 0.64 to 0.62.

Fund Flows

Weekly fund flows into global crypto ETPs decelerated significantly last week.

Global crypto ETPs saw around +213.4 mn USD in weekly net inflows across all types of cryptoassets, after +4,237.2 mn USD in net inflows the previous week.

Global Bitcoin ETPs have experienced net outflows totalling -1403.3 mn USD last week, of which +72.1 mn USD in net inflows were related to US spot Bitcoin ETFs.

The Bitwise Bitcoin ETF (BITB) in the US experienced net inflows, totalling +4.7 mn USD last week.

In Europe, the Bitwise Physical Bitcoin ETP (BTCE) experienced minor net inflows equivalent to +1.6 mn USD, while the Bitwise Core Bitcoin ETP (BTC1) experienced minor net inflows of +1.9 mn USD.

The Grayscale Bitcoin Trust (GBTC) has posted net outflows of -79.7 mn USD. The iShares Bitcoin Trust (IBIT), experienced net inflows of around +267.9 mn USD last week.

Meanwhile, flows into global Ethereum ETPs decelerated slightly last week, reaching +1557.5 mn USD in net inflows.

US spot Ethereum ETFs, also recorded net inflows of around +1846.6 mn USD on aggregate. The Grayscale Ethereum Trust (ETHE), has posted net outflows of -42.0 mn USD.

The Bitwise Ethereum ETF (ETHW) in the US has posted also net inflows of +34.6 mn USD.

In Europe, the Bitwise Physical Ethereum ETP (ZETH) saw minor net inflows of +9.7 mn USD while the Bitwise Ethereum Staking ETP (ET32) saw minor net outflows of -5.8 mn USD.

Altcoin ETPs ex Ethereum also experienced significant net inflows of +155.6 mn USD last week, underscoring the rising risk appetite for altcoins.

However, thematic & basket crypto ETPs continued to be out of favour, with net outflows of around --96.4 mn USD on aggregate last week. The Bitwise MSCI Digital Assets Select 20 ETP (DA20) saw minor net outflows of - 0.1 mn USD

Global crypto hedge funds exposure to Bitcoin has decreased last week. The 20-days rolling beta of global crypto hedge funds' performance to Bitcoin decreased to around 0.51 per yesterday's close, down from 0.64 from the week before.

On-Chain Data

Last week, Bitcoin's on-chain activity improved but still leave room for more upside.

Net buying volumes on bitcoin spot exchanges over the past 7 days continued to be negative with net selling volumes increasing to approximately -$1.12 bn on bitcoin spot exchanges.

However, when tracking the 30-day measure of “apparent demand” for Bitcoin, we see that it remained positive and continued to reaccelerate over the past week. This is signalling a renewed influx of short-term holders as well.

Furthermore, Bitcoin whale activity has shifted notably, with large holders now demonstrating net outflows from exchanges, indicating accumulation. Specifically, whale addresses withdrew a net -18,650 BTC to exchanges over the past week, signalling increased institutional buying appetite among major holders.

The prevailing exchange inflow dynamics would ordinarily support bullish price action for Bitcoin. However, BTC has remained range-bound, likely reflecting capital rotation toward altcoins. This is evidenced by expansion in our crypto performance dispersion index, indicating reduced correlation between altcoin and Bitcoin returns as investors diversify.

Nonetheless, based on recent data from Glassnode, the overall downward trend in exchange-held Bitcoin reserves remains intact. The current level stands at 2.886 mn BTC, representing approximately 14.5% of the total circulating supply.

Futures, Options & Perpetuals

Last week, BTC futures open interest decreased last week by -8.9k BTC across all exchanges, and decreased by -14.8k BTC on CME. Meanwhile, perpetual open interest decreased by around -6.3k BTC.

BTC perpetual funding rates continued to remain positive last week indicating a bullish sentiment among traders in the perpetual futures market and a long bias.

In general, when the funding rate is positive (negative), long (short) positions periodically pay short (long) positions, which is indicative of bullish (bearish) sentiment.

The BTC 3-months annualised basis increased significantly last week to around 8.6% p.a., averaged across various futures exchanges.

BTC option open interest decreased by around -58.6k BTC while the put-call open interest ratio decreased slightly to 0.58. We observed some significant spikes in the put-call volume ratio indicating an increasing appetite for downside protection.

Meanwhile, the 1-month 25-delta skew for BTC increased throughout the week from -1.9% to +1.5% signalling decreasing appetite for call options. The presence of a positive skew indicates some preference for downside protection.

At the time of writing, implied volatilities of 1-month ATM Bitcoin options are currently at around 37.4% p.a. on Deribit.

Bottom Line

Bitcoin rose +0.37% last week despite a $9bn Satoshi-era wallet transfer, as markets absorbed the shock with little volatility. Exchange balances fell to 14.5% of supply, while ETH, BNB, SOL, and SUI outperformed, signalling the early stages of an altcoin rotation.
Our Cryptoasset Sentiment Index remains bullish with 10 of 15 indicators above trend. Altcoin breadth widened, performance dispersion increased, and ETH outperformance pointed to rising risk appetite and loosening Bitcoin correlation.
Chart of the Week: Ethereum Spot ETFs saw $1.56bn in inflows vs. $1.40bn in BTC outflows—marking a rare ETH/BTC flow divergence. With 27% of ETH ETF AUM now composed of new inflows and $155.6mn also entering altcoin ETPs, institutional rotation appears firmly underway.

Appendix

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