US Crypto Fund Inflows Exceed $7.5 Billion, Institutional Confidence Rebounds, Bull Market May Have Started

Written by: SuperEx

Translated by: Baihua Blockchain

The crypto market has recently become a battleground of opposing views. Some analysts insist that a bull market has arrived, while others believe we are merely lingering at the tail end of the previous cycle. Neither side has fully convinced the other, but data may provide a clearer perspective that sentiment cannot. Let’s assess the current market temperature through the lens of capital flows.

According to data from SuperEx Research Institute, net inflows into US crypto investment products reached $785 million last week, marking the fifth consecutive week of positive inflows and bringing the cumulative inflow for 2025 to over $7.5 billion for the first time.

This stands in stark contrast to the massive capital outflows in February and March, when nearly $7 billion exited in just a few weeks. With the ongoing capital return, the question increasingly arises: Are we witnessing the true early stages of a bull market?

Expectations of Policy Easing Increase, Policy Uncertainty Decreases, Stimulating Risk Appetite

Since early May, the US and several major economies have issued a series of "easing" signals regarding trade and monetary policy, restoring investor confidence in the overall policy environment.

On one hand, the pace of negotiations between the White House and major economic partners has slowed, alleviating concerns about potential trade conflicts. On the other hand, recent statements from several Federal Reserve officials suggest that interest rates may have peaked, and market expectations for rate cuts later this year are gradually rising. In this context of dual easing, volatility in traditional financial markets has decreased, prompting capital to reconsider crypto assets as viable allocation targets.

Notably, the improvement in policy predictability has played a key role. The increased liquidity of Bitcoin and Ethereum ETFs, along with a softening regulatory stance in some regions, has bolstered institutional investor confidence, leading them to re-enter the market and become the main driving force behind the current wave of capital inflows.

Capital Concentrated in Core Assets, Ethereum Ecosystem Highly Favored

This round of capital inflows shows a clear structural preference: mainstream assets dominate, with Ethereum attracting the most attention outside of Bitcoin.

Data shows that Ethereum saw a net inflow of $205 million last week, the largest single-week increase for 2025 to date. From a technical perspective, recent upgrades to the Ethereum network have significantly enhanced its performance and scalability, further boosting institutional confidence in its future role in DeFi, AI-integrated blockchain services, and Rollup infrastructure.

More importantly, Ethereum is increasingly viewed as a "super-sovereign asset." It serves not only as a medium of exchange and collateral but also as the underlying "fuel" for Layer 2 ecosystems. Its value proposition is shifting from a single token to critical infrastructure.

Investors now see Ethereum as the "digital treasury bond" of the Web3 world—offering no yield but providing stability and liquidity akin to gateway-level assets. This shift in perception is the core reason for the increasing concentration of capital in Ethereum.

Is the Bull Market Really Back?

The key question is: Is this a true bull market, or merely a relief rally?

The answer lies not in social media sentiment but in the underlying mechanisms of capital allocation, user behavior, macroeconomic conditions, and technological momentum.

Institutional Inflows Indicate Confidence Return

The most compelling evidence is the scale of institutional participation. The $785 million inflow in a week is not driven by retail investors. This liquidity comes from hedge funds, family offices, and asset management companies reallocating their portfolios.

Moreover, the US is clearly in the lead, contributing $681 million of the total inflow this week. Germany follows with $86.3 million, while Hong Kong recorded an inflow of $24.4 million. This indicates that institutional confidence is not a localized phenomenon but a global one, albeit centered around the US.

When institutional capital begins to flow into high-risk, high-return crypto assets during relatively geopolitically tense periods, it often serves as a forward-looking signal. These participants are not chasing FOMO but are positioning themselves in anticipation of expected shifts in monetary policy or technology adoption curves.

Macroeconomic Tailwinds Are Emerging

From a macro perspective, several factors are aligning:

Interest rates have peaked: Although the Federal Reserve has not yet shifted to rate cuts, the market generally expects the tightening cycle to be over. A stable or easing interest rate environment typically benefits long-term assets, including cryptocurrencies.

Geopolitical Risk Hedging: The temporary truce in tariffs between the US and China, along with uncertainties in traditional markets (such as pressure on the stock market and a weakening dollar index), is driving investors toward alternative assets.

On-chain and Technical Indicators Heating Up

In addition to capital flows, on-chain activity is also showing encouraging signs. Daily active addresses, total value locked (TVL), and stablecoin supply on Ethereum and its Layer 2s (such as Arbitrum and Optimism) are on the rise. Bitcoin's hash rate remains at historical highs, indicating miner confidence and long-term sustainability.

Meanwhile, leading indicators such as the PI cycle top indicator and MVRV ratio have not yet signaled overheating, suggesting that the current rebound has not reached a euphoric state.

Caution Still Required

However, the market remains in a transitional phase rather than a full-blown frenzy:

• Retail Participation Lags: Google search trends for "Bitcoin" and "Ethereum" remain steady, indicating that retail FOMO has not yet kicked in, which is a hallmark of late-stage bull markets.

• Altcoin Cycle Languishing: While Ethereum performs strongly, most altcoins are still far below their 2021 highs. The market may continue to focus on mainstream assets before capital broadly rotates into mid- to low-market-cap tokens.

Structural Changes Support Long-term Bull Market Thesis

Beyond price charts and weekly inflows, fundamental improvements are occurring in the industry. The Ethereum Pectra upgrade, widespread adoption of ZK-rollups, and ongoing development of Bitcoin Layer 2 solutions (such as Lightning and Runes) are laying the groundwork for long-term scalability.

At the same time, the tokenization of real-world assets (RWA) is gaining traction among institutions. Companies like BlackRock, Franklin Templeton, and JPMorgan are actively exploring blockchain-based traditional securities settlement. The integration of traditional finance with crypto infrastructure suggests that this is not merely a seasonal rebound but a multi-year bull market narrative.

In short, the current wave of inflows is not only speculative but is supported by technological and institutional tailwinds.

Conclusion

So, is the bull market really back?

All signs point to a cautious "yes." We are witnessing sustained institutional inflows, a shift from macro headwinds to tailwinds, and key technological upgrades revitalizing foundational networks like Ethereum and Bitcoin. While the market has not yet entered a euphoric state— which is actually a good thing—it is clearly regaining strength.

For investors still on the sidelines, the coming weeks may be crucial. If inflows continue and the altcoin market follows suit, the bull market of 2025 may no longer be a theory but a reality.

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