Who exactly keeps injecting capital into the crypto bear market?

Original by Odaily Planet Daily (@OdailyChina)

Author: jk

Introduction: Who is Planting the Seeds for the Next Bull Run?

The crypto bull market from 2024 to 2025 was essentially an institutional story. It wasn't retail FOMO that drove Bitcoin above $100,000, but the ETF net inflows following BlackRock's IBIT launch and Strategy's continuous bond financing for BTC purchases. The underlying logic of that bull run was inseparable from the positions institutions quietly accumulated during the 2022-2023 bear market.

Now history seems to be repeating itself, but the details are starkly different. In the first quarter of 2026, Bitcoin retraced over 25% from its highs, Ethereum fell even deeper, and market sentiment cooled again. Yet against this backdrop, the directional actions of a group of institutions diverged from the price trend: corporate treasuries are adding, sovereign wealth funds are adding, bank-issued ETFs are listing, and traditional European financial institutions are entering the stablecoin space. This all points to the same question: If the next major wave is still to be driven by institutional capital, then during this bear market accumulation phase, who exactly is buying?

Odaily reporters conducted an in-depth investigation into institutional capital inflows in the crypto market during the first quarter.

Let's start with the conclusion: Despite the severe market correction in the first quarter, institutional capital continued to flow steadily into the crypto market. Bitcoin fell over 25% from around $88,000 to the mid-$60,000 range, while Ethereum dropped a steeper 35%. Yet Strategy (formerly MicroStrategy) still bucked the trend by increasing its holdings by over $10 billion in Bitcoin. Institutions like sovereign wealth fund Mubadala also added to their positions during the dip. Meanwhile, approximately 26 single-asset crypto ETFs were listed or filed for listing under the SEC’s new general listing rules framework.

The capital flowing in during Q1 2026 shows clear divergence: Some hedge funds significantly reduced positions (Brevan Howard cut IBIT holdings by 85%), while corporate treasuries, university endowments, ETF issuers, and Abu Dhabi's sovereign wealth fund seized the opportunity to buy the dip. In venture capital, while the number of deals plummeted by 49%, total quarterly financing still hovered around $5 to $6.8 billion, with three mega-deals (BVNK, Kalshi, Polymarket) accounting for half of that total. As for the external backdrop, the SEC's new Rule in September 2025 compressed the ETF approval cycle from 240 days to 75 days. On March 17, 2026, a joint statement from the SEC and CFTC designated staking rewards as non-securities, triggering a wave of intensive staking-based ETF issuances.

Part One: Active Institutional Buyers and Capital Deployment

Newly Issued Crypto ETFs (January – April 2026)

The first quarter saw a dense pipeline of newly issued crypto ETFs. Bitwise launched the Chainlink ETF (CLNK) on the NYSE Arca on January 14, with seed funding of $2.5 million. Canary Capital launched two products on the same day, January 13: the spot Litecoin ETF (LTCC, cumulative AUM of approximately $9.7 million, the first spot LTC product in the US) and the HBAR ETF (the first US spot Hedera product). The firm subsequently launched a staked SUI ETF offering staking rewards in February. Grayscale also launched a SUI staking ETF in February. 21Shares launched the SUI ETF (TSUI, AUM approximately $12.5 million) on Nasdaq on February 24, followed by the Polkadot ETF (TDOT, fee 0.30%, the first US spot DOT product, with first-week AUM of approximately $11 million) on March 6.

Established financial giants also launched ETFs. BlackRock introduced the iShares Ethereum Staking Trust (ETHB) on March 12, the first ETH staking ETF from a major mainstream institution, with approximately 82% of staking rewards distributed directly to holders. Morgan Stanley launched the Morgan Stanley Bitcoin Trust (MSBT) on April 8, the first bank-issued spot BTC ETF in the US, with a 0.14% fee, attracting $34 million on the first day and reaching a cumulative size of $133 million after 8 days. Additionally, ProShares launched the CoinDesk 20 Crypto Index ETF (KRYP) on the NYSE Arca between January and February; NEOS launched the Enhanced Bitcoin High Yield ETF (XBCI) around January 29; Bitwise launched the Proficio Currency Devaluation ETF (BPRO, combining BTC with precious metals); Nomura/Laser Digital launched the Bitcoin Diversified Yield Fund (BDYF, a tokenized yield product) on January 22; 21Shares launched a Strategy Yield ETP (STRC) backed by BTC on the Zurich exchange on February 25; and Hashdex expanded its NCIQ index fund during Q1 to cover BTC, ETH, XRP, SOL, and XLM.

In summary, New Money, represented by ETFs for smaller market cap coins, is being issued. However, the ETFs launched by more established Old Money still focus on high-market-cap, veteran coins.

Noteworthy ETF Filings (Pending Approval as of April 23)

Morgan Stanley filed S-1 registrations in early January for spot BTC (MSBT, already listed in April), Solana, and ETH trusts. Goldman Sachs filed for a Bitcoin Premium Income / Options Strategy ETF on April 14. Hyperliquid (HYPE) attracted competing applications from four institutions: Grayscale (GHYP, March 20), Bitwise (BHYP, April 10), 21Shares (THYP, April 14), and VanEck (VHYP), none of which have been approved for listing yet. Grayscale, VanEck, 21Shares, Bitwise, and Canary all submitted applications for a spot ADA ETF; CME's ADA futures contracts also began trading on February 9. Truth Social (Yorkville) filed for a BTC+ETH combo ETF and a Cronos Yield Enhancement ETF on February 13. Bitwise filed for 11 crypto strategy ETFs (covering AAVE, UNI, ZEC, TAO, etc.). REX-Osprey/Defiance filed for 27 crypto ETFs, including staking products and 3x leveraged products.

Currently, the Hyperliquid ETF remains the most anticipated.

ETF Fund Flows (Q1 2026)

Spot BTC ETF flows were volatile: January saw a net outflow of approximately $1.6 billion (crypto.com data showed it as the third consecutive month of net outflow), but with buying returning in March-April, the quarter ultimately closed near net positive. BlackRock's IBIT remained the flagship product, with net inflows of approximately $8.4 billion in Q1, but its AUM shrank from about $78 billion to roughly $54 billion due to the price decline. Ethereum ETFs recorded 19 consecutive days of positive inflows starting in early January. XRP ETFs saw net inflows of $1.07 billion for the quarter, with 43 consecutive days of positive flows, significantly outperforming BTC products during the same period. Solana ETFs (BSOL, FSOL) saw combined AUM surpass $1 billion in April; Goldman Sachs disclosed holding $108 million in SOL ETF positions.

Net inflow was positive for the full quarter

Bitcoin Treasury Purchases by Public Companies

Strategy (MSTR) continued its high-intensity accumulation this quarter. As of April 20, 2026, Strategy held a total of 815,061 BTC at an average price of $75,527, with a cost basis of approximately $61.6 billion. Japanese listed company Metaplanet (3350.T) disclosed on January 1, 2026, that it had purchased 4,279 BTC at an average price of $104,638, totaling over $380 million; throughout Q1, it added 5,075 BTC, disclosed on April 2, bringing its cumulative holdings to 40,177 BTC, with the Q1 purchase cost approximately $400 million.

Strive (ASST) purchased 123 BTC at an average price of $91,561 on January 13, totaling $11.3 million; it subsequently completed an all-stock merger with Semler Scientific on January 16. The combined companies held 12,798 BTC, ranking as the 11th largest corporate treasury. By mid-March, Strive held approximately 13,628 BTC through PIPE and the Semler merger. DDC Enterprise (NYSEAM) added about 600 BTC in January alone, accumulating 2,383 BTC by March 19, with a total value of $182 million.

BSTR Holdings (led by Adam Back and operated via Cantor SPAC) announced plans to go public backed by 30,021 BTC (valued at $2.14 billion). Twenty One Capital (XXI) held 43,514 BTC (valued at over $3.1 billion) as of April 2, making it the second-largest Bitcoin holder among public companies. Hyperscale Data (GPUS) held 663 BTC as of April 21, acquired for $50.3 million, targeting a treasury size of $100 million.

Ethereum and Staking-Related Corporate Treasuries

BitMine Immersion (BMNR) is currently the largest Ethereum corporate treasury. During Q1, it staked 74,880 ETH (approximately $219 million) via the MAVAN platform; in the week ending April 20, 2026, it purchased 101,627 ETH (over $230 million) in a single week, its largest weekly purchase in 2026 so far. As of April 20, the company held a cumulative total of approximately 5 million ETH, with about 3.33 million ETH staked, and an AUM of roughly $12.9 billion. SharpLink Gaming (SBET) is the second-largest Ethereum treasury, holding approximately 867,000 ETH (valued between $1.7 billion and $2.3 billion), nearly 100% staked, as disclosed on March 10.

Major Sellers

Bitcoin miners were net sellers overall in Q1. MARA Holdings sold 15,133 BTC between March 4 and 25, cashing out $1.1 billion to repurchase convertible notes. Riot Platforms sold 3,778 BTC, cashing out $290 million. Nakamoto Holdings sold 284 BTC. Genius Group liquidated its entire holding of 84 BTC on April 1. The Kingdom of Bhutan (Druk Holdings) gradually transferred approximately $42 million worth of BTC in small amounts during the year. Strategy alone accounted for 94% of the net BTC purchases by all public companies in March.

Movements by Banks and Asset Managers

Morgan Stanley didn't just file for ETFs; in February 2026, the bank applied for a Digital Trust Bank National Charter with the OCC and announced it would open BTC/ETH/SOL trading to retail clients via E*Trade/Zerohash.

UBS announced on January 23 that it would offer BTC/ETH trading services to its Swiss private banking clients, covering its $7 trillion wealth management business.

Citigroup announced the launch of institutional-grade BTC custody infrastructure at the Strategy World conference on February 26. Standard Chartered launched institutional BTC/ETH custody services in Hong Kong in January and is reportedly in talks to acquire full equity in its Zodia Custody subsidiary (April 8).

Banco Bilbao Vizcaya Argentaria (BBVA) recommended high-net-worth clients allocate 3-7% to crypto assets.

Twelve European banks (BBVA, BNP Paribas, ING, UniCredit, KBC, Danske Bank, Svenska Handelsbanken, CaixaBank, DZ Bank, DekaBank, Raiffeisen Bank, Banca Sella) formed the Qivalis euro stablecoin consortium based on the Fireblocks platform, compliant with the MiCA regulatory framework (April 21).

Vanguard opened access to third-party crypto ETFs for its 50 million brokerage clients on its $11 trillion platform. Fidelity offered a 1% BTC allocation option within its 401(k) retirement plans, reportedly attracting around $800 million in funds.

Nomura Securities, Daiwa Securities, and SMBC Nikko Securities all announced plans to launch cryptocurrency exchanges in Japan by the end of 2026.

13F Filings (Q4 2025 Holdings, Disclosed in February 2026)

Goldman Sachs' total crypto ETF holdings were approximately $2.36 billion, spanning BTC ($1.06 billion), ETH ($1 billion), XRP ($152 million), and SOL ($109 million). However, its BTC and ETH positions decreased by 39% and 27% quarter-over-quarter, respectively.

Mubadala (Abu Dhabi sovereign wealth fund) increased its IBIT position by 46% to 12.7 million shares (approximately $631 million), adding an estimated ~2,300 BTC counter-cyclically during the market downturn.

Al Warda Investments (under the Abu Dhabi Investment Authority) boosted its IBIT position to 8.2 million shares (approximately $437 million), pushing the total Abu Dhabi sovereign capital crypto exposure past the $1 billion mark.

Millennium increased its IBIT position by approximately 67% (adding an estimated ~8,100 BTC, becoming the single largest holder overall).

Jane Street increased its IBIT position by over 50% to 20 million shares.

Harvard University reduced its IBIT position by 21.5% but established its first ETH position (3.87 million shares of ETHA, valued at $86.8 million). Dartmouth College became the fourth Ivy League institution to enter the space.

On the reduction side: Brevan Howard slashed its IBIT position by 85% (from 37.5 million shares to 5.5 million, equivalent to reducing about 17,700 BTC); Farallon reduced by 70% (about 2,800 BTC); Tudor cut about 1,300 BTC; D.E. Shaw halved its IBIT position; Sculptor nearly liquidated its FBTC position (cut by approximately 90%).

Sovereign Wealth Funds and Governments

Beyond Mubadala and Al Warda, Luxembourg sovereign wealth fund FSIL maintained its 1% Bitcoin allocation (approximately €8.5 million), becoming the first eurozone sovereign wealth fund to hold BTC. El Salvador continued its "daily purchase of 1 BTC" strategy (now holding 7,547 BTC, worth approximately $635 million) and also purchased an additional $50 million in gold reserves on January 29. The Czech National Bank (which began purchases in November 2025, continuing into 2026) remains the only central bank globally holding Bitcoin.

The US Strategic Bitcoin Reserve has seen zero additions to date. CoinDesk confirmed on March 6 that the Trump administration's executive order is "progressing slowly"; the reserve still holds only approximately 328,372 seized BTC. White House Digital Asset Council member Patrick Witt reaffirmed the commitment, but no actual purchasing action has occurred. Among US states, only Texas injected $5 million into IBIT in November 2025 (with an additional $5 million remaining unspent). New Hampshire and Arizona have related legislation but have not yet deployed funds. Reports about CalPERS potentially allocating 1% (approximately $500 million) to BTC continue to circulate, but CalPERS has not officially confirmed.

Family Offices

Two surveys reveal contrasting trends: JPMorgan Private Bank's 2026 Family Office Report showed that among 333 surveyed institutions (average net worth $1.6 billion), 89% reported no Bitcoin allocation whatsoever, with AI investing being the primary focus. Conversely, the BNY Wealth/NOIA survey indicated that 74% of ultra-high-net-worth family offices are either investing in or exploring crypto assets (a significant increase from 53% the previous year), with a typical allocation of 2-5%; Asian institutions allocated around 5%, while US and European institutions allocated roughly 2-4%.

Part Two: Q1 2026 Crypto Venture Capital Financing Summary

Q1 2026 crypto VC funding presents a paradox: total capital was relatively stable (down 8% to 16% year-over-year), but the number of deals plummeted by 49%. The most comprehensive data comes from