Compiled by: Blockchain in Plain Language
The crypto market has recently become a battleground for opposing views. Some analysts insist that the bull market has arrived, while others argue that we are merely lingering at the tail end of the previous cycle. Neither side has fully convinced the other, but the data may provide a clear perspective that sentiment cannot bring. Let us evaluate the current market temperature through the lens of capital flows.
According to data from SuperEx Research Institute, net inflows into U.S. crypto investment products reached $785 million last week, marking the fifth consecutive week of positive inflows, making the cumulative inflow for 2025 exceed $7.5 billion for the first time.
This contrasts sharply with the massive capital outflows in February and March, when nearly $7 billion flowed out in just a few weeks. With ongoing capital inflows, the questions are multiplying: Are we witnessing the early stages of a real bull market?
Expectations for policy easing are increasing, and reduced policy uncertainty is stimulating risk appetite
Since early May, the U.S. 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, easing 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. Against this backdrop of dual easing, volatility in traditional financial markets has decreased, prompting capital to reassess crypto assets as viable allocation targets.
It is worth noting that the improvement in policy predictability has played a crucial role. The increased liquidity of Bitcoin and Ethereum ETFs, along with the softening of regulatory attitudes in some regions, has bolstered institutional investor confidence, re-entering the market and becoming the primary driving force behind the current wave of capital inflows.
Capital is concentrated in core assets, with the Ethereum ecosystem receiving particular favor
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 had a net inflow of $205 million last week, the largest single-week increase so far in 2025. From a technical perspective, recent upgrades to the Ethereum network have significantly improved 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 'supra-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 view 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 perspective is a key reason for the growing concentration of capital in Ethereum.
Is the bull market really back?
The key question is: Is this a real bull market, or just a relief bounce?
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 show a return of confidence
The most compelling evidence is the scale of institutional participation. The inflow of $785 million in a week is not driven by retail. This liquidity comes from hedge funds, family offices, and asset management firms reallocating their portfolios.
Moreover, the U.S. is clearly in the lead, contributing $681 million of this week's total inflow. Germany follows closely with $86.3 million, while Hong Kong recorded inflows of $24.4 million. This indicates that institutional confidence is not a localized phenomenon but rather a global one, despite being U.S.-centric.
When institutional capital starts flowing 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 rather positioning themselves for anticipated shifts in monetary policy or technological adoption curves.
Macroeconomic tailwinds are becoming apparent
From a macro perspective, several factors are aligning:
Interest rates have peaked: While the Federal Reserve has not yet turned to rate cuts, the market widely anticipates the end of the tightening cycle. A stable or easing interest rate environment is typically beneficial for long-term assets, including cryptocurrencies.
Geopolitical risk hedging: The temporary truce on tariffs between the U.S. and China, coupled with uncertainties in traditional markets (such as pressure on stock prices and a weakened dollar index), is pushing investors towards alternative assets.
On-chain and technical indicators are warming up
In addition to capital flows, on-chain activity is also showing encouraging signs. Daily active addresses, total locked value (TVL), and stablecoin supply for Ethereum and its Layer 2s (like 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 issued overheating signals, indicating that the current rebound has not yet reached a euphoric state.
Caution is still needed
However, the market remains in a transitional phase, rather than in full-blown euphoria:
Retail participation lags: Google searches for 'Bitcoin' and 'Ethereum' remain steady, indicating that retail FOMO has not yet kicked in, a hallmark of late-stage bull markets.
The altcoin cycle is sluggish: While Ethereum performs strongly, most altcoins are still far below their 2021 peaks. The market may continue to be dominated by mainstream assets before funds widely rotate into mid- to low-cap tokens.
Structural shifts support the long-term bull market narrative
In addition to price charts and weekly inflows, fundamental improvements are occurring in the industry. The Ethereum Pectra upgrade, the widespread adoption of ZK-rollups, and the ongoing development of Bitcoin Layer 2 solutions (such as Lightning and Runes) are laying the groundwork for long-term scalability.
Meanwhile, the tokenization of real-world assets (RWA) is gaining favor among institutions. Companies like BlackRock, Franklin Templeton, and JPMorgan are actively exploring blockchain-based settlement for traditional securities. The fusion of traditional finance and crypto infrastructure suggests that this is not just a seasonal rebound, but a narrative of a multi-year bull market.
In short, the current wave of inflows is not just speculative, but is supported by technological and institutional tailwinds.
Summary
So, is the bull market really back?
All signs point to a cautious 'yes.' We see continued institutional inflows, a shift from macro headwinds to tailwinds, and key technological upgrades of foundational networks like Ethereum and Bitcoin reinvigorating the market. While the market has not yet entered a frenzy—this is actually a good thing—it is clearly regaining strength.
For investors who are still on the sidelines, the next few weeks could be crucial. If inflows continue and the altcoin market follows suit, the bull market of 2025 may no longer be theoretical, but a reality.
