Original | Odaily Planet Daily (@OdailyChina)
Author | jk
Introduction: Who is positioning for the next bull market?
The 2024 to 2025 crypto bull market was fundamentally an institutional story. What drove Bitcoin past $100,000 was not retail FOMO, but the net inflows into BlackRock’s IBIT ETF and the continuous bond financing used by Strategy to buy Bitcoin. The underlying logic of that bull run hinges on institutional accumulation quietly completed during the 2022 to 2023 bear market.
History seems to be repeating itself, but the details are vastly different. In the first quarter of 2026, Bitcoin retreated more than 25% from its peak, with Ethereum falling even further, causing market sentiment to turn cold once again. Yet against this backdrop, a group of institutions acted in direct opposition to price movements: corporate treasuries were accumulating, sovereign wealth funds were accumulating, bank-linked ETFs were being listed, and traditional European financial institutions were entering the stablecoin space. All of this points to one key question: if the next major market rally is once again driven by institutional capital, then who is buying during this bear market phase?
Odaily reporters conducted an in-depth investigation into cryptocurrency market fund inflows in the first quarter.
To cut to the chase: Despite a severe market correction in the first quarter, institutional capital continued flowing into the crypto market. While Bitcoin dropped over 25% from around $88,000 to the mid-$60,000 range and Ethereum fell even further by 35%, Strategy (formerly MicroStrategy)逆势 increased its Bitcoin holdings by over $10 billion, and institutions such as the sovereign wealth fund Mubadala added to their positions during the dip. Meanwhile, approximately 26 single-asset crypto ETFs completed issuance or submitted applications under the SEC’s new generic listing framework.
Funds invested in Q1 2026 showed clear divergence: some hedge funds significantly reduced positions (Brevan Howard cut its IBIT holdings by 85%), while corporate treasuries, university endowments, ETF issuers, and the Abu Dhabi sovereign fund seized the opportunity to buy the dip. In venture capital, despite a 49% drop in the number of transactions, quarterly funding totals remained steady at approximately $5 to $6.8 billion, with three deals (BVNK, Kalshi, Polymarket) accounting for half of the total. On the external front, the SEC’s new rules in September 2025 shortened the ETF approval timeline from 240 days to 75 days; on March 17, 2026, the SEC and CFTC jointly declared staking rewards non-securities, triggering a surge in the launch of staking-based ETFs.
Part One: Active Institutional Buyers and Capital Deployment
Newly Launched Crypto ETFs (January–April 2026)
This quarter saw a surge of newly launched crypto ETFs. Bitwise launched the Chainlink ETF (CLNK) on the NYSE Arca on January 14, with seed funding of $2.5 million. On the same day, January 13, Canary Capital launched two products: the Litecoin Spot ETF (LTCC, with cumulative AUM of approximately $9.7 million, the first spot LTC product in the U.S.) and the HBAR ETF (the first spot Hedera product in the U.S.); the company subsequently launched a staked SUI ETF with staking yields in February. Grayscale also launched a staked SUI ETF in February. 21Shares launched the SUI ETF (TSUI, AUM of approximately $12.5 million) on Nasdaq on February 24, and on March 6, launched the Polkadot ETF (TDOT, with a fee of 0.30%, the first spot DOT product in the U.S., with first-week AUM of approximately $11 million).
Major players have also launched several ETFs. BlackRock introduced the iShares Ethereum Staking Trust (ETHB) on March 12, becoming the first mainstream institutional ETH staking ETF, with approximately 82% of staking yields distributed directly to holders. Morgan Stanley launched the Morgan Stanley Bitcoin Trust (MSBT) on April 8, the first U.S. bank-sponsored spot BTC ETF, with a fee of 0.14%, attracting $34 million on its first day and reaching a total AUM of $133 million after eight days. Additionally, ProShares launched the CoinDesk 20 Crypto Index ETF (KRYP) between January and February, listed on NYSE Arca; NEOS introduced the Enhanced Bitcoin High-Yield ETF (XBCI) around January 29; Bitwise launched the Proficio 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 the Strategy Yield ETP (STRC), backed by BTC, in Zurich on February 25; and Hashdex expanded NCIQ to cover BTC, ETH, XRP, SOL, and XLM during the first quarter.
Overall, new money—represented by ETFs targeting lower-market-cap cryptocurrencies—is being launched, but established players continue to focus their ETF offerings on high-market-cap, well-established cryptocurrencies.
ETF applications worth watching (still under review as of April 23)
Morgan Stanley filed S-1 applications in early January for spot BTC (MSBT, listed in April), Solana, and ETH trusts. Goldman Sachs filed an application on April 14 for a Bitcoin premium income/options strategy ETF. Hyperliquid (HYPE) attracted bids from four institutions: Grayscale (GHYP, March 20), Bitwise (BHYP, April 10), 21Shares (THYP, April 14), and VanEck (VHYP)—none have yet been approved for listing. Grayscale, VanEck, 21Shares, Bitwise, and Canary have all filed applications for spot ADA ETFs, and CME launched its ADA futures contract on February 9. Truth Social (Yorkville) filed applications on February 13 for a BTC+ETH composite ETF and a Cronos yield-enhanced ETF. Bitwise submitted applications for 11 crypto strategy ETFs covering AAVE, UNI, ZEC, TAO, and others. REX-Osprey/Defiance filed 27 crypto ETF applications, including staking products and 3x leveraged products.
Currently, Hyperliquid's ETF remains the most anticipated.
ETF Fund Flows (Q1 2026)
Spot BTC ETF fund flows have shown significant volatility: in January, there was a net outflow of approximately $1.6 billion (according to Crypto.com, marking the third consecutive month of net outflows), but with buying pressure returning in March–April, the quarter ended with a net inflow. BlackRock’s IBIT remains the flagship product, with net inflows of approximately $8.4 billion in the first quarter; however, due to price declines, its AUM declined from approximately $78 billion to approximately $54 billion. Ethereum ETFs set a record of 19 consecutive days of positive inflows in early January. The XRP ETF recorded net inflows of $1.07 billion for the quarter, with 43 consecutive days of positive inflows, significantly outperforming BTC-related products during the same period. The combined AUM of Solana ETFs (BSOL, FSOL) surpassed $1 billion in April; Goldman Sachs disclosed a $108 million position in SOL ETFs.
Net inflow for the full quarter was positive.
Publicly traded company Bitcoin treasury purchase records
Strategy (MSTR) continued aggressive accumulation this quarter. As of April 20, 2026, Strategy holds a total of 815,061 BTC at an average price of $75,527, with a cost basis of approximately $61.6 billion. Japanese publicly traded 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, holding 40,177 BTC as of April 2, with a first-quarter acquisition cost of approximately $400 million.
Strive (ASST) purchased 123 BTC on January 13 at an average price of $91,561, totaling $11.3 million; it then completed a all-stock merger with Semler Scientific, resulting in the combined company holding 12,798 BTC, ranking it as the 11th largest corporate treasury. The merger was completed on January 16. By mid-March, Strive had accumulated approximately 13,628 BTC through the PIPE and the Semler merger. DDC Enterprise (NYSEAM) added approximately 600 BTC in January alone, reaching a total of 2,383 BTC by March 19, with a total value of $182 million.
BSTR Holdings (led by Adam Back and operated by Cantor SPAC) announced it will proceed with its listing using 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, having entered at $50.3 million, with a target treasury size of $100 million.
Ethereum and staking-related enterprise treasuries
BitMine Immersion (BMNR) is currently the largest Ethereum corporate treasury, staking 74,880 ETH (approximately $219 million) via the MAVAN platform in the first quarter; and purchasing 101,627 ETH (over $230 million) in the week ending April 20, 2026—its largest single-week purchase since 2026. As of April 20, the company holds approximately 5 million ETH in total, with about 3.33 million ETH staked, representing an AUM of approximately $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% of which has been staked, as disclosed on March 10.
Main seller
Bitcoin mining companies were net sellers overall in the first quarter. MARA Holdings sold 15,133 BTC between March 4 and 25, generating $1.1 billion to repurchase convertible notes; Riot Platforms sold 3,778 BTC for $290 million; Nakamoto Holdings sold 284 BTC; and 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 throughout the year. Strategy, a single company, accounted for 94% of all publicly traded companies' net BTC purchases in March.
Bank and asset management institution trends
Morgan Stanley did not only submit an ETF application; the bank also applied to the OCC for a national charter as a digital trust bank in February 2026 and announced it would offer BTC/ETH/SOL trading to retail customers through E*Trade/Zerohash.
UBS announced on January 23 that it will offer BTC/ETH trading services to its Swiss private banking clients, covering its $7 trillion wealth management business.
Citigroup announced on February 26 at the Strategy World conference the launch of institutional-grade BTC custody infrastructure. Standard Chartered launched institutional BTC/ETH custody services in Hong Kong in January and is reportedly negotiating to acquire full ownership of its Zodia Custody subsidiary (April 8).
BBVA recommends that high-net-worth clients allocate 3–7% of their assets to cryptocurrency.
Twelve European banks (BBVA, BNP Paribas, ING, UniCredit, KBC, Danske Bank, Swedbank, CaixaBank, DZ Bank, DekaBank, Landesbank Rheinland-Pfalz, Banca Sella) have formed the Qivalis euro stablecoin consortium on the Fireblocks platform, in compliance with the MiCA regulatory framework (April 21).
Vanguard offers third-party crypto ETFs to its 50 million brokerage clients on its $1.1 trillion platform. Fidelity, which offers a 1% BTC allocation option in 401(k) retirement plans, has reportedly attracted approximately $800 million in assets.
Nomura Securities, Daiwa Securities, and SMBC Nikko Securities have all announced plans to launch cryptocurrency exchanges in Japan by the end of 2026.
13F Disclosure (Q4 2025 holdings, disclosed in February 2026)
Goldman Sachs' cryptocurrency ETF holdings total approximately $2.36 billion, covering BTC ($1.06 billion), ETH ($1 billion), XRP ($152 million), and SOL ($109 million), but BTC and ETH positions were each reduced by 39% and 27% respectively compared to the previous month.
Mubadala (Abu Dhabi's sovereign wealth fund) increased its IBIT holdings by 46% to 12.7 million shares (approximately $631 million), adding around 2,300 BTC during a market downturn.
Al Warda Investments (a subsidiary of the Abu Dhabi Investment Authority) increased its IBIT holdings to 8.2 million shares (approximately $437 million), pushing the total cryptocurrency exposure of Abu Dhabi’s sovereign capital past $1 billion.
Millennium increased its holdings of IBIT by approximately 67% (an increase of about 8,100 BTC, making it the largest holder overall).
Jane Street increased its stake in IBIT 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 ETHA, valued at $86.8 million). Dartmouth College became the fourth Ivy League school to enter the market.
Regarding reductions: Brevan Howard significantly cut its IBIT position by 85% (from 37.5 million shares to 5.5 million shares, equivalent to approximately 17,700 BTC sold); Farallon reduced its position by 70% (approximately 2,800 BTC); Tudor cut around 1,300 BTC; D.E. Shaw halved its IBIT holdings; Sculptor nearly liquidated its FBTC position (reduction of approximately 90%).
Sovereign wealth funds and national governments
In addition to Mubadala and Al Warda, Luxembourg’s sovereign wealth fund FSIL maintains a 1% Bitcoin allocation (approximately €8.5 million), becoming the first eurozone sovereign wealth fund to hold BTC. El Salvador continues its strategy of purchasing 1 BTC daily (currently holding 7,547 BTC, totaling approximately $635 million) and added $50 million in gold reserves on January 29. The Czech National Bank, which purchased Bitcoin in November 2025 and continues to hold it through 2026, remains the world’s only central bank holding Bitcoin.
The U.S. Strategic Bitcoin Reserve has seen zero additional purchases to date. CoinDesk confirmed on March 6 that progress on Trump’s executive order has been slow; the reserve still holds only approximately 328,372 seized BTC. Patrick Witt, a member of the White House Digital Assets Committee, reiterated the commitment, but no actual purchases have occurred. Among U.S. states, only Texas has allocated $5 million to IBIT in November 2025, with another $5 million remaining unused. New Hampshire and Arizona have enacted related legislation, but neither has deployed funds. Reports suggesting CalPERS plans to allocate 1% (approximately $500 million) to BTC continue to circulate, but CalPERS has not officially confirmed this.
Family office
Two surveys reveal starkly contrasting trends: The J.P. Morgan Private Bank 2026 Family Office Report found that 89% of the 333 surveyed institutions (with an average net worth of $1.6 billion) reported no Bitcoin allocation, with AI investment being their top priority. In contrast, the BNY Mellon Wealth/NOIA survey showed that 74% of ultra-high-net-worth family offices are investing in or exploring crypto assets—a significant increase from 53% the previous year—with typical allocations ranging from 2% to 5%, approximately 5% among Asian institutions, and 2% to 4% among U.S. and European institutions.
Part 2: Q1 2026 Cryptocurrency Venture Capital Funding Summary
In the first quarter of 2026, crypto VC funding presented a paradox: total capital remained relatively robust (down 8% to 16% year-over-year), but the number of transactions plummeted by 49%. The most comprehensive statistics come from Crypto-Fundraising.info (April 1), reporting 222 transactions totaling $6.81 billion, including M&A; excluding M&A, pure VC funding amounted to 183 transactions totaling $4.77 billion. DefiLlama/DL News (April 4, VC-only) tracked 53 deals exceeding $10 million each, totaling approximately $5 billion. JPMorgan estimated total digital asset inflows for the first quarter at around $11 billion, roughly one-third of the same period in 2025. Galaxy Research’s quarterly crypto VC report, last updated as of April 23, has not yet been released, but its Q4 2025 baseline data ($8.5 billion / 425 transactions) is available for quarter-over-quarter comparison.
Core data
Compared to Q1 2025 ($5.37 billion in VC funding across 358 deals) and Q4 2025 ($8.5 billion across 425 deals), Q1 2026 saw total VC funding of approximately $4.77 billion, a 11% year-over-year decline and a 44% quarter-over-quarter drop; deal count fell to 183, a sharp 49% year-over-year decline and a 57% quarter-over-quarter decline. Notably, the average deal size surged 76% year-over-year to $35.9 million (median: $8 million), reflecting pronounced polarization: seed rounds were the most active by volume (37 deals, totaling $252 million), while the four C-rounds averaged $108.8 million each. Pre-Seed stage averages stood at just $1.75 million, with the mid-stage market nearly evaporating.
Three transactions consumed half a quarter
This quarter’s funding was characterized by extreme concentration and significant backloading. Just in March, $4.43 billion in funding was raised (accounting for 65% of the quarter), while February saw a modest $686 million.
Just these three transactions combined totaled $3.4 billion, accounting for approximately half of the total disclosed funding for the quarter: the acquisition of payment sector target BVNK ($1.8 billion, March 17), the growth round led by Coatue in the prediction market platform Kalshi ($1 billion, valuation of $22 billion, March 19), and Intercontinental Exchange’s strategic equity stake in Polymarket ($600 million, March 27).
The battle for leadership in prediction markets has already intensified in the funding arena.
Other notable large-scale financings include: Rain ($250 million Series C in the stablecoin payments space, led by Iconiq, Dragonfly, and Galaxy, valuation ~$1.95 billion, January 9); BitGo completed its IPO on the NYSE, raising $213 million (January 22); XBTO secured a strategic investment of $217 million (March 25); Flying Tulip tokenized offering raised $206 million (FDV $1 billion); Whop received a $200 million investment from Tether (February 25); BlackOpal raised $200 million for Latin American RWA (January 8); Kraken/Payward completed a $200 million secondary market transaction led by Deutsche Börse, at a $13.3 billion valuation; LMAX Group received a $150 million investment from Ripple (January 15); Alpaca completed a $150 million Series D; Bluesky secured a $100 million Series B led by Bain Capital Crypto (March 19); Anchorage Digital received a $100 million investment from Tether, at a valuation exceeding $4 billion (February).
Track distribution: Payments and prediction markets outpace DeFi
The star sectors of the 2021 bull market—blockchain games, NFTs, and L1 infrastructure—have nearly vanished from the top of the funding rankings.
- The payments/stablecoin segment led with $2.39 billion (35% share, 17 deals);
- Prediction markets followed closely with $1.72 billion (25.2%, 11 deals);
- Finance/CeFi ranks third with $835 million (12.2%, 25 deals).
- RWA (Real-World Asset) financing: $284 million (4.2%, 7 transactions)
- Trading market/platform: $255 million (3.7%, 2 transactions)
- Infrastructure / L1-L2 funding: $184 million (2.7%, 12 deals)
- DeFi: only $89 million (1.3%, 5 transactions)
- NFTs, blockchain games, and the metaverse are negligible.
The top three sectors collectively accounted for 72% of the total disclosed funding for the quarter.
Active investment institutions
Coinbase Ventures led all institutional investors with participation in 12 deals, more than double the number of the second-place investor. Following were: Tether (8 deals), Animoca Brands (7 deals), CMT Digital (6 deals), and a16z crypto, Castle Island, Big Brain, and Galaxy Digital (each with 5 deals), tied for fourth.
Most active funds in March
Traditional financial institutions are entering the infrastructure space with unprecedented intensity: Franklin Templeton participated in four investments, Intercontinental Exchange invested in Polymarket, Deutsche Börse took a stake in Kraken, and Citadel Securities, Bain Capital, Sequoia Capital, and Alibaba also participated in funding rounds during the first quarter. Geographically, the three largest financings (BVNK, Kalshi, Polymarket) and BitGo’s IPO all originated in the United States, reflecting U.S. capital’s share in crypto VC remaining at approximately 55%, consistent with the level seen in Q4 2025.
Conclusion: Institutional funds exhibit a dumbbell structure.
At the beginning of 2026, the institutional crypto investment landscape is undergoing a dual divergence.
On the buyer side, institutional players with a long-term holding conviction—such as Strategy, BitMine, Metaplanet, Mubadala, and the BlackRock ETF ecosystem—increased their positions amid market downturns, while tactical hedge funds (Brevan Howard, Tudor, Farallon) and most Bitcoin mining companies shifted to net sellers. Just Strategy alone purchased nearly as much Bitcoin in the first quarter as all other publicly traded companies combined, and its single-week buying volume from April 13–19 ranked as the third-largest on record.
On the venture capital side, the same polarized dynamic is unfolding: super-large funding rounds in payments and prediction markets continue to expand, while smaller and mid-sized projects generally face a funding drought. The shift in category leadership—from DeFi/NFT/blockchain gaming to stablecoins, prediction markets, and compliant CeFi infrastructure—means the industry’s growth engine is gradually transitioning from speculative crypto-native narratives toward transaction models more closely aligned with regulated fintech.
The greatest current uncertainty stems from the U.S. strategic Bitcoin reserve: despite high-profile administrative announcements for over a year, actual fund deployment remains zero. If the National Defense Authorization Act in the second half of 2026 establishes a funding pathway, it will fundamentally reshape market demand. Until then, it is corporate treasuries and sovereign wealth funds—not Washington—that are truly paying.