Record Inflows: Digital asset funds saw $785M in inflows last week, marking five consecutive weeks of positive flows, with a year-to-date total of $7.5B.
Bitcoin Dominance: Bitcoin led with $557M in weekly inflows, while Ethereum attracted $205M, boosted by the Pectra upgrade.
Institutional Appetite: Exchange outflows, like $1B in Bitcoin withdrawn from Coinbase, signal strong institutional buying, per Bitwise analyst André Dragosch.
Macro Boost: A U.S.-China trade pause spurred investor confidence, reversing $7B in outflows from February and March.
Regulatory Optimism: A crypto-friendly U.S. administration and spot ETF success drive market momentum.
The world of decentralized finance (DeFi) is buzzing with optimism in 2025 as digital asset funds record unprecedented demand. According to CoinShares, U.S.-based crypto investment products notched a fifth straight week of inflows, attracting $785 million last week alone, bringing the year-to-date total to a staggering $7.5 billion. This surge follows a rocky February and March, when funds saw $7 billion in outflows after Bitcoin hit a record high of $108,786 on January 20. Now, with institutional appetite accelerating and macroeconomic tailwinds like a U.S.-China trade pause, the crypto market is regaining its shine.
Bitcoin and Ethereum Lead the Charge
Bitcoin remains the star of the show, drawing $557 million in weekly inflows, reflecting its status as a preferred institutional asset. Since the launch of U.S. spot Bitcoin ETFs in January 2024, these funds have amassed $62.9 billion in cumulative net inflows, surpassing their previous high of $61.6 billion set in February 2024. Ethereum, meanwhile, is staging a comeback, with $205 million in inflows last week, pushing its year-to-date total to $575 million. CoinShares attributes Ethereum’s resurgence to renewed investor optimism following the successful Pectra upgrade, which enhanced the network’s scalability and decentralization.
Smaller altcoins are also gaining traction. Sui outperformed with $11.7 million in weekly inflows, overtaking Solana’s year-to-date total of $76 million with $84 million. XRP saw $31.6 million in inflows, signaling growing institutional interest in diversifying beyond Bitcoin and Ethereum.
Key Statistics
Asset Weekly Inflows (May 19, 2025) YTD Inflows (2025) Notable Milestone Bitcoin $557M N/A $62.9B in U.S. ETF inflows since Jan 2024 Ethereum $205M $575M Boosted by Pectra upgrade Sui $11.7M $84M Overtakes Solana’s $76M YTD XRP $31.6M N/A Growing altcoin interest Total $785M $7.5B Fifth consecutive week of inflows
Source: CoinShares, Cointelegraph Institutional Appetite Accelerates
The rally isn’t just about fund flows. André Dragosch, head of European research at Bitwise, points to a telling trend: exchange outflows. On May 13, one day after the U.S. and China announced a 90-day pause on additional tariffs, Coinbase recorded a massive 9,739 Bitcoin withdrawal worth over $1 billion—the highest net outflow of 2025. “This signals that institutional appetite is accelerating,” Dragosch told Cointelegraph. Unlike inflows to exchanges, which often indicate selling pressure, outflows suggest investors are moving assets to long-term storage, a bullish sign for crypto prices.
This institutional enthusiasm aligns with broader market optimism. A recent Cointelegraph post on X noted, “5% is the new 1% for portfolio allocations,” quoting Bitwise’s CIO on institutions preparing for billions in crypto inflows.
Macro and Regulatory Tailwinds
The U.S.-China trade pause, announced on May 12, has been a game-changer. By cutting import tariffs by 24% for both nations, the agreement eased investor fears of economic disruption, spurring demand for risk assets like cryptocurrencies. Meanwhile, a crypto-friendly U.S. administration under President Trump has fueled hopes for a more favorable regulatory landscape. Citigroup’s 2025 outlook highlights how Trump’s election sparked a sharp crypto rally, with the total market cap growing 94% in 2024 from $1.65 trillion to $3.21 trillion. The launch of spot Bitcoin ETFs in January 2024 and Ethereum ETFs in July 2024 drove $36.4 billion and $2.4 billion in inflows, respectively, legitimizing crypto as an institutional asset class.
Understanding Digital Asset Fund Flows
Fund Inflows: Money invested into crypto products like ETFs, reflecting investor confidence.
Exchange Outflows: When coins leave exchanges for private wallets, signaling long-term holding.
Spot ETFs: Regulated funds tracking crypto prices, driving institutional adoption.
Pectra Upgrade: Ethereum’s 2025 update, boosting scalability and DeFi appeal.
Challenges and Outlook
Despite the bullish momentum, challenges remain. February and March’s $7 billion in outflows were triggered by profit-taking after Bitcoin’s peak, compounded by a hawkish Federal Reserve and the Bybit hack, which dented sentiment. Ethereum ETFs have underperformed Bitcoin ETFs, with $500 million in outflows in their first five weeks due to lower liquidity and lack of staking provisions. Still, with regulatory clarity on the horizon—potentially including stablecoin legislation in 2025—and institutional adoption growing, the outlook for DeFi remains bright.
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