This report is for professional investors and information purposes only. Persons without professional investment experience should not rely on it. Not investment advice or a personal recommendation. Cryptoassets are high risk and volatile and you may lose all capital invested. See full risk information at the end of this document.
- Performance: Major cryptoassets such as bitcoin and ether continued to underperform US equities last week amid ongoing ETP outflows, with the hawkish FOMC surprise (rate held at 3.50–3.75%, easing bias dropped) sending shockwaves through markets and weighing on risk assets despite easing geopolitical tensions following the US-Iran MoU.
- Cryptoasset Sentiment Index: Our Cryptoasset Sentiment Index[1] declined last week from neutral to slightly negative sentiment, consistent with institutional demand momentum sitting at multi-year lows - though this also leaves risk asymmetrically skewed to the upside, as demand growth tends to mean-revert over time.
- Chart-of-the-Week Strategy's perpetual preferred (STRC), the benchmark digital credit instrument, traded down to an all-time intraday low of 82.5 on Friday - attributed to forced leveraged liquidations rather than a genuine repricing of Strategy's credit risk. Because Strategy has been bitcoin's key institutional buyer in 2026 (~174,300 BTC YTD, ~55% STRC-funded), a sputtering STRC engine points to lower near-term acquisitions until the dividend rises or financial conditions ease, even as the risk of forced bitcoin sales looks low given ~7.7 months of USD liquidity.
Chart of the Week
Performance
Last week, major cryptoassets like bitcoin and ether continued to underperform US equities amid ongoing outflows from ETPs.
This happened despite a signing of the Memorandum of Understanding between US and Iran that decreased geopolitical uncertainty and sent oil prices tumbling. However, uncertainties remain as talks between both parties are still ongoing in Switzerland this week and actual maritime traffic in the Strait of Hormuz – based on real-time Bloomberg data – remains low.
On another note, the FOMC convened last week with Kevin Warsh as its new chairman. On the FOMC meeting, three takeaways from June stand out:
First, the hawkish surprise: the Fed held its target rate at 3.50-3.75% - its fourth straight hold and a unanimous 12-0 in Warsh's debut as Chair - but dropped the easing bias from its statement, sparking a sharp hawkish repricing and a flatter yield curve. Markets had already priced out the cuts they'd assumed, at times pushing hike odds above 50% for later in 2026 after April CPI hit 3.8% year-over-year, the hottest in nearly three years.
Second, the inflation message: the FOMC restated its strong commitment to returning inflation to 2%, and Warsh struck a regime-change tone on discipline, underscoring that 2% has long been the target - "We'll fix five years of misses on inflation."
Third, the dot plot: the median participant now sees the Fed Funds Rate ending 2026 near 3.8%, up from 3.4% in March - flipping from an implied cut to an implied hike - with nine of 18 pencilling in at least one hike this year and 17 of 18 seeing inflation risks to the upside.
The risk from here is that Fed Funds expectations still carry meaningful repricing risk given the recent pickup in inflation (ISM prices paid) - especially if the Fed is serious about bringing (core) inflation back to its 2% target.
This hawkish surprise sent shockwaves through capital markets and in particular bitcoin digital credit markets. Strategy's perpetual preferred equity (STRC) – which is considered to be the benchmark digital credit instrument - traded down to an all-time intraday low of 82.5 on Friday (Chart-of-the-Week).
Industry insiders attributed the sell-off to forced leveraged liquidations rather than a significant repricing of Strategy's credit risks.
The reason why that is important is that Strategy has been the key institutional buyer of bitcoin in 2026 so far, mostly because of significant issuances of STRC.
More specifically, Strategy bought a combined amount of 174,300 BTC year-to-date of which, based on our estimations, approximately 55% (~96,000 BTC) have been funded via STRC preferred equity issuances and around 45% (~77,500 BTC) have been funded via MSTR common stock issuances.
Due to significant outflows from global bitcoin ETPs, Strategy's buying has essentially made up all positive institutional demand for bitcoin in 2026 from treasury companies and ETPs.
In other words, this means that a key engine of bitcoin's institutional demand – i.e. Strategy's STRC – is sputtering. Lower bitcoin acquisitions by Strategy appear to be quite likely in the short term until either Strategy increases its dividend or financial conditions will ease again (i.e. sovereign yields will decline sustainably).
That being said, Michael Saylor has recently hinted on Twitter/X once again that Strategy continued to increase its bitcoin holdings (and possibly also USD holdings) last week despite these market ructions in digital credit which is an encouraging signal.
In general, we think that the risk of forced bitcoin sales by Strategy in the very short term appears to be relatively unlikely as, theoretically speaking, the company still has around 7.7 months of USD liquidity to cover ongoing dividend expenses without raising further capital.
It will be interesting to watch how Strategy will utilise common stock issuances to raise USD liquidity over the coming weeks.
All in all, our general read is that bitcoin and other major cryptoassets may continue to consolidate in the short term until there is a decisive easing in monetary policy and financial conditions again.
That said, institutional demand momentum is already at multi-year lowsAlthough downside risks still remain, the implication is that risk is asymmetrically skewed to the upside as institutional demand growth tends to mean-revert over time. Put simply, it is more likely that institutional demand growth recovers from here rather than becoming even more negative.
In general, among the top 10 crypto assets Hyperliquid, TRON, and Solana were the relative outperformers. Ethereum slightly outperformed bitcoin last week.
Sentiment
Our in-house “Cryptoasset Sentiment Index”[2] declined last week from neutral to slightly negative sentiment.
At the moment, 8 out of 15 indicators remain above their short-term trend.
Notably, Bitcoin's funding rate and exchange inflows, global crypto ETP flows and the crypto dispersion index all turned positive, reversing the previous week's readings. The funding rate shift was marginal, but elevated exchange inflows often signal investors are ready to sell into strength. Altcoins, meanwhile, saw positive catalysts, with strong net flows and rotating narratives.
The Crypto Fear & Greed Index slightly declined last week. At 20/100, it remains neither at its local highs or lows for the year. As of this morning, it remains in the “extreme fear” zone.
Performance dispersion slightly increased last week in line with strong global altcoin ETP net flows. The AI sector which has outperformed month-over-month has given up many of its gains, as it has now underperformed week over week, seemingly due to a rotation into DeFi and gaming tokens.
When dispersion increases, it may indicate that the market appears to be driven by a more diverse set of narratives which, in our analysis, has historically been associated with periods of increasing risk appetite in prior market cycles.
Altcoin outperformance vis-à-vis Bitcoin declined to 40% of our tracked altcoins in the index. Ethereum outperformed bitcoin last week. This was likely largely led by the positive global ETP net flows for the week.
Sentiment in traditional financial markets as measured by our in-house measure of Cross Asset Risk Appetite (CARA) declined slightly from 0.7 to 0.62 over the past week, signalling that risk appetite has decreased in traditional markets.
CME Bitcoin Commercials Net Positioning shows that the difference between long and short CME Bitcoin futures contracts. The reading still sits at record lows of around –14.14% of open interest, suggesting that investors have not taken off any short leverage over the last couple of weeks.
All in all, the week was defined by continued altcoin dispersion, with strong global ETP flows among the blue chips and a rotation in market narratives. This occurred despite Bitcoin's idiosyncratic net outflows, with persistent short leverage and rising exchange inflows perhaps stemming any near-term short reversal.
Fund Flows
Global crypto ETPs experienced around –187.4 mn USD in net outflows last week, across all types of cryptoassets, after -33.9 mn USD in net outflows the previous week.
Global Bitcoin ETPs continued to experience net outflows of –237.7 mn USD last week, of which –252.6 mn USD in net outflows were related to US spot Bitcoin ETFs.
The Bitwise Bitcoin ETF (BITB) in the US experienced no net inflows or outflows (+/- 0 mn USD) last week.
In Europe, the Bitwise Physical Bitcoin ETP (BTCE) experienced net inflows equivalent to +1.6 mn USD, as the Bitwise Core Bitcoin ETP (BTC1) experienced net inflows of around +1 mn USD.
The Grayscale Bitcoin Trust (GBTC) posted net outflows of –156.3 mn USD whereas, the iShares Bitcoin Trust (IBIT) experienced sharp net outflows of around –44.6 mn USD last week.
Meanwhile, global Ethereum ETPs experienced +14.6 mn USD in net inflows last week, of which US spot Ethereum ETFs recorded net outflows of around –10.1 mn USD on aggregate.
The Grayscale Ethereum Trust (ETHE) posted net outflows of –0.5 mn USD, whilst the iShares Ethereum Trust (ETHA) saw net inflows of +13.2 mn USD.
The Bitwise Ethereum ETF (ETHW) in the US experienced net outflows of - 4.0 mn USD last week.
In Europe, the Bitwise Physical Ethereum ETP (ZETH) recorded net outflows of -0.2 mn USD, whilst the Bitwise Ethereum Staking ETP (ET32) saw net inflows of +0.2 mn USD.
Altcoin ETPs ex Ethereum also saw net inflows of +36.6 mn USD last week.
Thematic & basket crypto ETPs posted net outflows of -0.9 mn USD on aggregate last week. The Bitwise MSCI Digital Assets Select 20 ETP (DA20) recorded no net inflows or outflows of +/- 0 mn USD last week.
In summary, global Bitcoin ETPs, most notably Grayscale's and BlackRock's US ETFs, once again accounted for most global net outflows. Altcoin products, including Ethereum, Solana and Hyperliquid, recorded positive flows over the week, whilst basket and thematic products experienced minor net outflows.
On-Chain Data
Bitcoin has posted an indecisive week of price action, continuing to oscillate between $60k and $64k as the market digests the recent contraction. From a local perspective, price remains largely trendless.
Across the week, total digital asset market capitalisation remained largely flat, rising by just $5bn to $2.26tn. Bitcoin also remains the dominant market factor, with both 180-day correlation and beta to Bitcoin across the altcoin sector residing near all-time highs. On balance, this suggests that Bitcoin continues to lead broader market direction, while altcoins remain amplified expressions of its movement.
Aggregate investor stress remains elevated, with the value of capital held at a loss estimated at approximately $856bn, equivalent to around 80% of all invested value. In addition, just 53% of circulating supply remains in profit, highlighting the severity of investor stress from both a supply and dollar-denominated perspective.
Global volumes rose sharply during the correction but have since retraced, with activity declining across all major segments of the market.
| Market | Value (USD) | Percentile (1Yr) |
|---|---|---|
| Spot | $34,766,117,663 | 2.2% |
| Futures | $210,892,693,779 | 3.0% |
| Options | $22,904,936,709 | 10.7% |
| On-chain | $23,198,342,962 | 1.1% |
| ETF | $8,173,664,776 | 0.8% |
| DAT | $10,908,485,124 | 12.0% |
This highlights renewed investor apathy, suggesting that the market has returned to a phase of indecision. Participants appear reluctant to re-engage while uncertainty persists over the risk of further downside and the possibility of missing a renewed move higher.
The supply held by Long-Term Holders (LTHs), representing mature investors who have held their coins for more than 155 days, has continued to rise, reaching a new all-time high of 14.8mn BTC. This suggests that, on balance, more tenured investors remain unwilling to distribute coins at prevailing price levels. Over time, this acts as a tightening mechanism across the market's supply side.
As the supply side continues to tighten, the Accumulation Trend Score, which normalises and scores balance changes across different wallet-size cohorts, has recorded a sharp increase in accumulation. Historically, bottom formation has involved a gradual reduction in available supply as coins migrate into the hands of value-oriented investors. Although this process is typically slow and requires time to crystallise, the emergence of these dynamics is an encouraging sign for the underlying market structure.
Notably, Strategy's STRC continues to trade below par, falling to a new all-time low of $83 and widening its discount to the $100 stated amount. When the instrument trades below par, additional issuance becomes less efficient, placing further pressure on the company's near-term accumulation strategy.
The severity of the discount may also reflect growing investor concern around Strategy's recent capital management. With debt obligations now approximately half the size of its treasury balance sheet, and the market remaining deep within a bear regime, investor risk tolerance toward Digital Credit products has declined.
On the downside, the Realised Price at $53.4k, representing the market's average cost basis, and the 200-week moving average at $62.2k have historically provided useful proxies for terminal cycle-low regions during deep bear markets. Price has already entered the upper boundary of this range, with our base case remaining that terminal valuation forms somewhere within the broader zone. However, should the Realised Price fail to provide support, the LTH Realised Price at $48k remains the next key downside reference.
To the upside, the Short-Term Holder cost basis at $71.7k, representing the average purchase price of newer investors, and the True Market Mean at $77.1k, representing the average purchase price of active investors, mark important local and macro market midpoints. A decisive reclaim of these levels has historically been associated with renewed market momentum and a potential return of risk-on conditions.
Taken together, the market remains in a fragile and largely trendless state, characterised by subdued activity, elevated investor stress, and limited conviction across major trading venues. However, the continued growth in Long-Term Holder supply and the sharp increase in accumulation suggest that the supply side is gradually tightening as coins migrate toward more value-oriented investors. While these dynamics are constructive for the underlying market structure, they typically require time to mature. From here, the $53.4k–$62.2k region remains the key downside support zone, while a decisive reclaim of the Short-Term Holder cost basis and True Market Mean would be required to signal a more durable return of risk-on conditions.
Futures, Options & Perpetuals
Over the past week, BTC perpetual futures open interest declined slightly by approximately -5.85k BTC, while CME futures open interest also fell by around -1.93k BTC versus the prior week. That combination suggests positioning was reduced across both offshore perpetuals and more institutionally oriented venues, although the decline in CME open interest was modest. Aggregate futures liquidations were broadly unchanged from the prior week. In total, liquidations reached roughly $2.40bn over the week, versus $2.44bn previously, with long liquidations of $1.25bn and short liquidations of $1.15bn.
The week's positioning reflected a market that remained reactive to macro headlines. The US and Iran signed an MOU aimed at ending the conflict, which initially supported risk sentiment and helped crypto stabilise. However, the rally lost momentum after Kevin Warsh's debut FOMC meeting struck a hawkish tone, putting pressure back on risk assets. BTC is again testing its 200-week moving average, which currently sits around $62.2k, and is holding it as support for now. Liquidity is now forming around $62k on the downside and $65k on the upside, leaving the market in a tight range around this key long-term level.
Perpetual funding rates, measured on a 7-day moving average, ended the week higher at around +2.25% annualised, up from +1.76% last week. That suggests futures positioning became slightly more constructive, although the move remains modest and does not yet point to a meaningful rebuild in aggressive long exposure.
At the same time, the BTC 3-month annualised basis ticked down to around +2.8%, from +3.07% last week. That leaves the futures curve still modestly positive, but slightly flatter, reinforcing the view that term futures demand remains present but subdued.
In options markets, BTC Deribit options open interest increased modestly by roughly +15.03k BTC, bringing total open interest up to 443.7k BTC. The Deribit put-to-call open interest ratio increased slightly to 0.64, while the equivalent metric across IBIT options moved lower to 0.69 by week's end.
Taken together, these moves suggest options exposure continued to rebuild, but positioning became more mixed across crypto-native and ETF-linked markets. The rise in the Deribit put-to-call ratio points to a modest increase in relative downside hedging among crypto-native participants, while the decline in the IBIT ratio suggests ETF-linked options investors became slightly less defensive.
The 25-delta skew moved higher across the term structure during the week, with the short end, particularly the 1-week and 1-month tenors, rising more substantially. That suggests near-term downside protection became more expensive as traders hedged against renewed weakness around the 200-week moving average and a still fragile macro backdrop.
Total GEX, on a 7-day moving average basis, was largely flat around -$2.50bn. This suggests dealer positioning remains meaningfully negative, keeping the market sensitive to hedging flows around nearby strike levels. In practical terms, spot may remain mechanically reactive if price moves sharply through key liquidity zones.
Dealer gamma exposure also remains concentrated around important nearby levels, with the bulk of negative gamma still clustered around the $65k strike. That leaves the market most sensitive to a renewed move towards the upper end of the current liquidity range. By contrast, positive gamma is concentrated around the $75k to $76k area, suggesting stabilising dealer flows sit meaningfully above spot and are unlikely to provide near-term support unless BTC stages a stronger recovery.
In short, Bitcoin remained fragile but stable around its 200-week moving average after macro headlines drove two-way price action during the week. Liquidations were broadly unchanged at $2.40bn and balanced between longs and shorts, while both perpetual and CME open interest declined. Funding improved modestly, basis softened slightly, options exposure rebuilt, and short-dated skew rose as traders paid up for near-term downside protection. With dealer gamma still negative and liquidity concentrated around $62k to $65k, prices remain highly sensitive around this key support zone.
Bottom Line
- Performance: Major cryptoassets such as bitcoin and ether continued to underperform US equities last week amid ongoing ETP outflows, with the hawkish FOMC surprise (rate held at 3.50–3.75%, easing bias dropped) sending shockwaves through markets and weighing on risk assets despite easing geopolitical tensions following the US-Iran MoU.
- Cryptoasset Sentiment Index: Our Cryptoasset Sentiment Index declined last week from neutral to slightly negative sentiment.consistent with institutional demand momentum sitting at multi-year lows - though this also leaves risk asymmetrically skewed to the upside, as demand growth tends to mean-revert over time.
- Chart-of-the-Week: Strategy's perpetual preferred (STRC), the benchmark digital credit instrument, traded down to an all-time intraday low of 82.5 on Friday - attributed to forced leveraged liquidations rather than a genuine repricing of Strategy's credit risk. Because Strategy has been bitcoin's key institutional buyer in 2026 (~174,300 BTC YTD, ~55% STRC-funded), a sputtering STRC engine points to lower near-term acquisitions until the dividend rises or financial conditions ease, even as the risk of forced bitcoin sales looks low given ~7.7 months of USD liquidity.
Notes
[1] The Cryptoasset Sentiment Index is a composite indicator consisting of 15 different sub-indicators covering sentiment, on-chain, derivatives, flows developments as well as sentiment in traditional financial markets. A 90-day rolling z-score is used to standardise and aggregate these sub-indicators.
[2] The Cryptoasset Sentiment Index is a composite indicator consisting of 15 different sub-indicators covering sentiment, on-chain, derivatives, flows developments as well as sentiment in traditional financial markets. A 90-day rolling z-score is used to standardise and aggregate these sub-indicators.
Appendix
Data subject to change
Combined positioning = futures and options in % of Ol
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