Who exactly keeps pouring money into the crypto bear market?

Original: Odaily Planet Daily (@OdailyChina)

Author: jk

Introduction: Who is Setting the Stage for the Next Bull Run?

The crypto bull market from 2024 to 2025 was, at its core, an institutional story. What drove Bitcoin beyond $100,000 at that time was not retail FOMO, but the net inflows from BlackRock's IBIT ETF following its launch and Strategy's continuous bond financing for BTC purchases. The underlying logic of that bull run cannot be separated from the positions institutions quietly built during the 2022-2023 bear market.

Now, history seems to be repeating itself, but the details are starkly different. In Q1 2026, Bitcoin retraced over 25% from its highs, Ethereum fell even deeper, and market sentiment turned cold again. Yet, against this backdrop, the actions of a group of institutions are moving in the opposite direction of price trends: corporate treasuries are adding, sovereign wealth funds are adding, bank-issued ETFs are launching, and traditional European financial institutions are entering the stablecoin space. All of this points to one question: If the next major wave is still to be driven by institutional capital, then who exactly is buying during this bear market accumulation phase?

Odaily journalists conducted an in-depth investigation into crypto market capital inflows for the first quarter.

Conclusion first: Even with the market's brutal correction in Q1, institutional capital continued to pour into the crypto market. Bitcoin fell over 25% from around $88,000 to the mid-$60,000 range, Ethereum suffered a deeper 35% decline, yet Strategy (formerly MicroStrategy) still bucked the trend by adding over $10 billion in Bitcoin. Institutions like sovereign wealth fund Mubadala also increased their holdings amid the dip. Meanwhile, approximately 26 single-asset crypto ETFs were either launched or had applications filed under the SEC's new universal listing rules framework.

The capital injected in Q1 2026 shows clear divergence: some hedge funds significantly reduced their positions (Brevan Howard cut its IBIT holdings by 85%), while corporate treasuries, university endowments, ETF issuers, and the Abu Dhabi sovereign wealth fund seized the opportunity to buy the dip. In venture capital, while the number of transactions plummeted by 49%, the total quarterly financing amount remained at approximately $5-6.8 billion, with three deals (BVNK, Kalshi, Polymarket) accounting for half of the total. External factors: 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 classified staking rewards as non-securities, triggering a wave of intensive staking ETF launches.

Part 1: Active Institutional Buyers and Capital Deployment

New Crypto ETFs Launched (January-April 2026)

This quarter saw intensive launches of new crypto ETF products. Bitwise launched the Chainlink ETF (CLNK) on the NYSE Arca on January 14 with $2.5 million in seed capital. Canary Capital launched two products on January 13: the Litecoin Spot ETF (LTCC, total AUM ~$9.7 million, the first spot LTC product in the US) and the HBAR ETF (the first US spot Hedera product); the company subsequently launched the staking SUI ETF with staking rewards in February. Grayscale also launched a SUI staking ETF in February. 21Shares launched the SUI ETF (TSUI, AUM ~$12.5 million) on Nasdaq on February 24, and the Polkadot ETF (TDOT, fee 0.30%, the first US spot DOT product, first-week AUM ~$11 million) on March 6.

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

In summary, New Money, i.e., ETFs for smaller market cap coins, are being launched, but the ETFs from more established players (Old Money) still focus on high-market-cap, established coins.

Notable ETF Applications (Pending Approval as of April 23)

Morgan Stanley filed S-1 applications in early January for a spot BTC (MSBT, already listed in April), Solana, and ETH trust. Goldman Sachs filed for a Bitcoin Premium Income/Option 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 received approval to list yet. Grayscale, VanEck, 21Shares, Bitwise, and Canary have all submitted applications for an ADA spot ETF. CME's ADA futures contracts also began trading on February 9. Truth Social (Yorkville) filed applications 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.

For now, the Hyperliquid ETF remains the most anticipated.

ETF Fund Flows (Q1 2026)

Spot BTC ETF fund flows showed significant volatility: net outflows of approximately $1.6 billion in January (marking the third consecutive month of net outflows according to crypto.com data), but with the return of buying pressure in March-April, the quarter ultimately narrowed to a net positive value. 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 about $54 billion due to the price decline. Ethereum ETFs recorded a streak of 19 consecutive days of positive inflows in early January. The XRP ETF saw net inflows of $1.07 billion for the quarter, with a streak of 43 consecutive positive inflow days, significantly outperforming BTC products during the same period. Solana ETFs (BSOL, FSOL) saw their combined AUM surpass $1 billion in April; Goldman Sachs disclosed a $108 million position in SOL ETFs.

Positive net inflows for the entire quarter

Public Company Bitcoin Treasury Purchases

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, representing a cost basis of approximately $61.6 billion. Japanese listed company Metaplanet (3350.T) disclosed on January 1, 2026, that it purchased 4,279 BTC at an average price of $104,638, totaling over $380 million; for the entire first quarter, it added a total of 5,075 BTC. When disclosed on April 2, it held a cumulative 40,177 BTC, with Q1 purchase costs around $400 million.

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

BSTR Holdings (led by Adam Back, operated via Cantor SPAC) announced plans to go public with 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, with a treasury target of $100 million.

Ethereum and Staking-Related Corporate Treasuries

BitMine Immersion (BMNR) is currently the largest Ethereum corporate treasury, staking 74,880 ETH (~$219 million) via the MAVAN platform in Q1; during the week of April 20, 2026, it purchased 101,627 ETH (over $230 million) in a single week, its largest weekly buy of 2026. As of April 20, the company held approximately 5 million ETH, of which ~3.33 million were staked, representing an AUM of approximately $12.9 billion. SharpLink Gaming (SBET) is the second-largest Ethereum treasury, holding approximately 867,000 ETH (valued at $1.7-$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 4-25, raising $1.1 billion to repurchase convertible notes; Riot Platforms sold 3,778 BTC, raising $290 million; Nakamoto Holdings sold 284 BTC; Genius Group liquidated all its 84 BTC on April 1. The Kingdom of Bhutan (Druk Holdings) transferred small amounts of BTC totaling ~$42 million during the year. Strategy alone accounted for 94% of the net BTC increase among all public companies in March.

Movements by Banks and Asset Managers

Morgan Stanley didn't just file for ETFs; in February 2026, it applied for a national digital trust bank charter from the OCC and announced it would offer 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 at the Strategy World conference on February 26 that it was launching an institutional-grade BTC custody infrastructure. Standard Chartered launched institutional BTC/ETH custody services in Hong Kong in January and is reportedly in talks to acquire full ownership of its Zodia Custody unit (April 8).

BBVA recommended high-net-worth clients allocate 3-7% of their portfolios to crypto assets.

12 European banks (BBVA, BNP Paribas, ING, UniCredit, KBC Group, 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 up third-party crypto ETFs to 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 about $800 million in assets.

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 held a total of approximately $2.36 billion in crypto ETFs, spanning BTC ($1.06 billion), ETH ($1 billion), XRP ($152 million), and SOL ($109 million); however, its BTC and ETH positions were reduced sequentially by 39% and 27%, respectively.

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

Al Warda Investments (a subsidiary of the Abu Dhabi Investment Authority) increased its IBIT holdings to 8.2 million shares (~$437 million), pushing the total crypto exposure of Abu Dhabi sovereign capital past $1 billion.

Millennium Management increased its IBIT holdings by approximately 67% (adding ~8,100 BTC value, becoming the largest overall holder).

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

Harvard University reduced its IBIT holdings 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 selling side: Brevan Howard significantly reduced its IBIT holdings by 85% (from 37.5 million shares to 5.5 million shares, effectively selling ~17,700 BTC); Farallon Capital cut by 70% (~2,800 BTC); Tudor Investment Corporation reduced by ~1,300 BTC; DE Shaw halved its IBIT position; Sculptor Capital almost completely liquidated its FBTC holdings (~90% reduction).

Sovereign Wealth Funds and Governments

In addition to Mubadala and Al Warda, Luxembourg's sovereign wealth fund FSIL maintained a 1% Bitcoin allocation (~€8.5 million), becoming the first Eurozone sovereign wealth fund to hold BTC. El Salvador continued its "buy 1 BTC daily" strategy (currently holding 7,547 BTC, total ~$635 million) and also purchased $50 million in gold reserves on January 29. The Czech National Bank (which started buying in November 2025, continuing into 2026) remains the world's only central bank holding Bitcoin.

The US Strategic Bitcoin Reserve has seen zero additions to date. CoinDesk confirmed on March 6 that progress under the Trump executive order has been "slow"; the reserve still holds only the approximately 328,372 seized BTC. White House Digital Assets Council member Patrick Witt reaffirmed the commitment, but no actual purchase has occurred. Among US states, only Texas injected $5 million into IBIT in November 2025 (with another $5 million remaining unallocated). New Hampshire and Arizona have related legislation but have not deployed any funds. Reports about CalPERS potentially allocating 1% (~$500 million) to BTC continue to circulate, but CalPERS has not officially confirmed them.

Family Offices

Two surveys reveal contrasting trends: JPMorgan Private Bank's 2026 Family Office Report indicated that among 333 surveyed institutions (average net worth $1.6 billion), 89% reported having no Bitcoin allocation, with AI investments being the primary focus. Conversely, a survey by BNY Wealth/NOIA showed 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 ~5%, while US and European institutions allocated ~2-4%.

Part 2: Q1 2026 Crypto Venture Capital Financing Summary

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