Bitcoin and Cryptos: Institutional adoption and ETF inflows drive the mMarket

The cryptocurrency market continues to show strong momentum, with Bitcoin (BTC) up +3.5% since Monday, reaching over $115,000. This increase is driven by a massive inflow into spot Bitcoin ETFs, totaling more than $1.6 billion since the start of the week. The total assets under management in these ETFs now stand at $149 billion, representing 6.57% of circulating bitcoins, with nearly 40% captured by BlackRock’s IBIT.

At the same time, some investors are more cautious about companies holding bitcoin in their treasuries, whose stocks have fallen: Strategy (-17%) and Metaplanet (-33%). Other major cryptocurrencies are following Bitcoin’s trend: Ether (ETH) +4.77%, Solana (SOL) +15.5%, and XRP +5.7%.

Current economic environment

• ETF inflows: Demand for spot Bitcoin ETFs reflects growing institutional interest in Bitcoin as a diversification asset.

• Volatility and sentiment: The market remains sensitive to regulatory announcements and corporate cryptocurrency strategies.

• Institutional adoption: The involvement of major players like BlackRock strengthens market legitimacy and liquidity.

• Overall trend: Major cryptocurrencies often follow Bitcoin, serving as a barometer for the broader crypto market.

Investment recommendation

Investing in Bitcoin and major cryptocurrencies can be attractive for investors who can manage volatility.

• Why?

  • Bitcoin remains the most liquid and widely adopted cryptocurrency, with a growing role in ETFs and institutional portfolios.

  • Ether and other altcoins benefit from technological trends (DeFi, smart contracts) supporting medium-term growth.

  • Exposure to these assets allows portfolio diversification with an asset largely uncorrelated to traditional financial markets.

Key message: Cryptocurrencies offer high return potential due to institutional adoption and technological growth, but they remain highly volatile and sentiment-driven.

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Risk Scenario

1. High volatility: Large and rapid price swings are common.

2. Regulatory risk: Restrictive measures on cryptocurrencies or ETFs could negatively impact prices.

3. Technological and security risk: Hacks, protocol bugs, or lost wallet access could cause losses.

4. Corporate exposure: Companies holding Bitcoin may see their stock prices heavily impacted by market declines.

5. Sentiment-driven correlation: Cryptocurrencies are sensitive to capital inflows and investor sentiment.