Market Insights: May 2025 | Week3
Wavebridge Research/
Explosive Growth in U.S. Spot Bitcoin ETFs and Institutional Demand
Since January, U.S. spot Bitcoin ETFs have seen a remarkable $41 billion in cumulative inflows, with $2.97 billion entering in April and an additional $2.64 billion in May alone. This surge in ETF-driven demand has dramatically outpaced supply: in the past two weeks, U.S. ETFs acquired 26,700 BTC-over three times the 7,200 BTC mined during the same period. The supply squeeze, exacerbated by the April 2023 halving, is stark: daily mining yields just 480 BTC, while ETFs are absorbing an average of 1,700 BTC per day. Major institutional players are at the forefront-BlackRock’s IBIT and other large ETFs are aggressively accumulating, J.P. Morgan Chase has invested $1.7 billion in Bitcoin-related ETFs, and the firm Strategy added 13,390 BTC to its holdings. Japanese listed company Metaplanet now holds 6,796 BTC, surpassing the government of El Salvador, while public pension funds in at least 14 U.S. states have increased their Bitcoin-related equity holdings by 44% quarter-over-quarter, investing $632 million. In contrast, the Wisconsin Investment Board has exited its ETF positions entirely, signaling a strategic shift. Globally, the Central Bank of Russia has officially recognized Bitcoin as an investment asset, and Ukraine, in partnership with Binance, is moving to enshrine Bitcoin reserves in law-a reflection of the growing trend of sovereign Bitcoin integration. Corporations have also emerged as the largest net Bitcoin buyers, adding 157,000 BTC (worth approximately $16 billion) so far this year. Even miners, after months of selling pressure, have reversed course, increasing their holdings by 2,700 BTC in the past month-a potential sign of renewed confidence.
Ethereum’s Institutional Momentum and Technological Innovation
Ethereum, meanwhile, has shown remarkable resilience. Despite four consecutive days of price declines, large holders have continued to accumulate, with 450,000 ETH flowing into whale wallets over the past month, bringing their total to 16.79 million ETH. Institutional interest is also on the rise, as evidenced by London-based Abraxas Capital’s $500 million ETH purchase in just six days. Ethereum’s market capitalization has soared 42% to $308 billion, placing it among the world’s leading assets, while ongoing technical innovation-such as the recent Pectra upgrade and the forthcoming Fusaka update-continues to strengthen the network. Ripple (XRP) has faced headwinds, with open interest in derivatives plunging 6.67% and investor sentiment weakening, but the SEC’s pending decision on a spot XRP ETF on June 17 has the market’s full attention. In DeFi, Uniswap has reclaimed a 65% market share among decentralized exchanges, and technical breakthroughs such as Filecoin Foundation and Lockheed Martin’s successful use of IPFS for space data transmission highlight the sector’s rapid progress. Global financial institutions like J.P. Morgan, Chainlink, and VanEck are pushing into asset tokenization, blockchain-based funds, and decentralized lending, while the stablecoin market is dominated by Tether (USDT), which has surpassed a $150 billion market cap and now accounts for 61% of the sector. Citi underscores stablecoins’ growing role in payments and liquidity management, and firms like Anchorage and the state of Wyoming are ramping up efforts to enhance security and regulatory compliance.
Evolving U.S. Crypto Regulation and Market Resilience
On the regulatory front, the U.S. Department of Justice is pressing charges against Tornado Cash co-founder Roman Storm for money laundering and sanctions evasion, while the Nebraska legislature has unanimously passed new regulations imposing additional requirements and costs on Bitcoin miners. The Senate is preparing for a final vote on the GENIUS Act, which would mandate federal oversight for stablecoins with market caps over $10 billion-part of a broader push to reinforce the dollar’s global dominance and trust in the digital economy. SEC Chairman Paul Atkins has outlined a new regulatory framework focused on crypto issuance, custody, and trading infrastructure, and the OCC has allowed traditional banks to offer crypto services without prior approval, intensifying competition with fintechs. Despite these regulatory shifts, industry expansion continues apace: Galaxy Digital has completed its Nasdaq listing, New York City is actively courting crypto firms, Wintermute is expanding its U.S. presence, and Robinhood is championing tokenization as a democratizing force in finance. Meanwhile, concerns persist over foreign capital flows into Trump’s $TRUMP meme coin, and FTX has initiated a $5 billion second distribution to creditors. The SEC’s upcoming decision on the Franklin Templeton spot XRP ETF on June 17 remains a key market event.
Global Regulatory Shifts and Institutional Integration
Globally, regulatory and institutional momentum is accelerating. The EU’s Markets in Crypto-Assets (MiCA) regulation is now in force, aiming to provide clear rules, consumer protection, and market stability. The UK will require digital asset firms to report user data and all transaction details from 2026, further enhancing transparency. Brazil’s central bank has introduced strict controls on stablecoin transfers, prioritizing customer protection and transaction security, while Singapore has approved Franklin Templeton’s tokenized U.S. dollar money market fund, advancing blockchain-based financial innovation. Emerging markets are also making strides: Tajikistan has launched its first regulated digital asset exchange with central bank support; Saudi Arabia has strategically acquired MicroStrategy shares for crypto exposure; Gibraltar has established new clearing rules for crypto derivatives; and Germany’s BaFin has granted BitGo a MiCA license for pan-European digital asset services. Dubai is integrating crypto payments for public services via a partnership with Crypto.com, and Thailand is preparing to issue a 500 million baht digital investment token (G-token) as part of its sovereign borrowing strategy. On the corporate front, Hong Kong luxury watchmaker Topwin has unveiled a Bitcoin accumulation strategy, China’s Addentax is acquiring 8,000 BTC and Trump’s official meme coin, Kyrgyzstan is launching a gold-backed stablecoin (USDKG), and Tether has listed its gold-backed token on a Thai exchange. In Brazil, Belo Horizonte’s city council has passed a Bitcoin bill, underscoring the growing adoption of digital assets at the municipal level. Around the world, governments and enterprises alike are forging new paths in regulation, innovation, and real-world integration, ushering in a new era for the digital asset ecosystem.