Original | Odaily Planet Daily (@OdailyChina)

Author | jk

Introduction: Who is Laying the Grounds for the Next Bull Market?

The cryptocurrency bull market from 2024 to 2025 is essentially a story of institutionalization. At that time, what propelled Bitcoin to break through the $100,000 mark was not the FOMO sentiment of retail investors, but the net inflows from ETFs after BlackRock's IBIT launch and the continuous bond financing for coins through Strategy. The underlying logic of that bull market cannot be separated from the positions silently built by institutions during the bear market of 2022 to 2023.

Now, history seems to be repeating itself, but the details are entirely different. In the first quarter of 2026, Bitcoin retreated over 25% from its peak, and Ethereum fell even deeper by 35%, while market sentiment turned cold again. However, against this backdrop, a number of institutions are acting contrary to price trends: corporate treasuries are increasing their positions, sovereign wealth funds are buying more, bank-affiliated ETFs are launching, and traditional European financial institutions are entering the stablecoin space. All of this points to the same question: If the next major market movement is to be driven by institutional funds, then during this bear market phase, who is actually buying?

Odaily reporters conducted an in-depth investigation into the inflow of funds into the cryptocurrency market in the first quarter.

To conclude: Even though the market experienced a brutal correction in the first quarter, institutional funds continued to flow into the cryptocurrency market. Bitcoin fell over 25% from about $88,000 to around $60,000, with Ethereum's loss reaching as deep as 35%, yet Strategy (formerly MicroStrategy) still increased its holdings of Bitcoin by over $10 billion, and sovereign wealth fund Mubadala and other institutions took advantage of the drop to accumulate. Meanwhile, about 26 single-asset cryptocurrency ETFs completed issuance or application under the newly updated general listing rules of the SEC in the United States.

In the first quarter of 2026, the buying funds underwent significant differentiation: some hedge funds drastically reduced their holdings (Brevan Howard cut its IBIT position by 85%), while corporate treasuries, university endowments, ETF issuers, and the Abu Dhabi sovereign fund seized the opportunity to buy at lower prices. In venture capital, while the number of transactions plummeted by 49%, the total financing for the quarter remained around $5 to $6.8 billion, with three deals (BVNK, Kalshi, Polymarket) accounting for half the total. In terms of external background, new regulations from the SEC in September 2025 compressed the approval cycle of ETFs from 240 days to 75 days; on March 17, 2026, the SEC and CFTC jointly stated that staking rewards were not considered securities, which sparked a wave of intensive issuance of staking-type ETFs.

Part One: Active Institutional Buyers and Fund Deployment

Newly Launched Cryptocurrency ETFs (January to April 2026)

This quarter saw a dense issuance of new cryptocurrency ETF products. Bitwise launched the Chainlink ETF (CLNK) on the New York Stock Exchange Arca on January 14, with seed funding of $2.5 million. Canary Capital launched two products on January 13: a Litecoin spot ETF (LTCC, total AUM about $9.7 million, the first spot LTC product in the United States) and an HBAR ETF (the first spot Hedera product in the U.S.); this company subsequently launched a staking SUI ETF that included staking income in February. Grayscale also launched a SUI staking ETF in February. 21Shares launched a SUI ETF (TSUI, AUM about $12.5 million) on NASDAQ on February 24 and a Polkadot ETF (TDOT, fee rate 0.30%, the first spot DOT product in the U.S., first-week AUM about $11 million) on March 6.

Old money also released some ETFs. BlackRock launched the iShares Ethereum Staking Trust (ETHB) on March 12, becoming the first ETH staking ETF from a mainstream institution, with about 82% of the staking rewards directly allocated to holders. Morgan Stanley launched the Morgan Stanley Bitcoin Trust (MSBT) on April 8, the first bank-affiliated spot BTC ETF in the U.S., with a fee rate of 0.14%. It raised $34 million on its first day, and after 8 days, its total scale reached $133 million. Additionally, ProShares launched the CoinDesk 20 Crypto Index ETF (KRYP) between January and February, listed on NYSE Arca; NEOS launched a high-yield Bitcoin ETF (XBCI) around January 29; Bitwise launched Proficio Currency Depreciation ETF (BPRO, a combination of BTC and precious metals); and Nomura/Laser Digital launched the Bitcoin Diversified Income Fund (BDYF, a tokenized income product) on January 22. 21Shares launched a strategy income ETP (STRC) backed by BTC in Zurich on February 25; Hashdex expanded its NCIQ in the first quarter to cover BTC, ETH, XRP, SOL, and XLM.

Overall, new money is being focused on issuing ETFs for lower-market-cap coins, but the ETFs launched by more established old money still concentrate on high-market-cap legacy coins.

Noteworthy ETF Applications (Pending Approval as of April 23)

Morgan Stanley submitted S-1 applications for spot BTC (MSBT, listed in April), Solana, and ETH trusts at the beginning of January. Goldman Sachs submitted an ETF application for Bitcoin premium income/option strategy on April 14. Hyperliquid (HYPE) attracted four institutions competing to apply: Grayscale (GHYP, March 20), Bitwise (BHYP, April 10), 21Shares (THYP, April 14), and VanEck (VHYP), none of which have yet been approved for listing. Grayscale, VanEck, 21Shares, Bitwise, and Canary have all submitted applications for an ADA spot ETF, and CME's ADA futures contracts were launched on February 9. Truth Social (Yorkville) submitted a BTC+ETH combo ETF and Cronos income-enhanced ETF application on February 13. Bitwise submitted 11 cryptocurrency strategy ETF applications covering AAVE, UNI, ZEC, TAO, and more. REX-Osprey/Defiance submitted 27 cryptocurrency ETF applications, including staking-type products and 3x leveraged products.

Currently, Hyperliquid's ETF is still the most anticipated.

ETF Fund Flow Situation (First Quarter 2026)

Spot BTC ETF fund flows showed significant fluctuations: January saw net outflows of about $1.6 billion (crypto.com reported a third consecutive month of net outflows), but as buying returned in March and April, the quarter ultimately narrowed to a net positive value. BlackRock's IBIT remained the flagship product, with a net inflow of about $8.4 billion in the first quarter, but due to the price decline, AUM shrunk from about $78 billion to approximately $54 billion. Ethereum ETFs created a record of positive inflows for 19 consecutive days at the beginning of January. XRP ETF saw a net inflow of $1.07 billion for the entire quarter, with positive inflows for 43 days, significantly outperforming BTC-related products during the same period. Solana ETFs (BSOL, FSOL) collectively saw AUM exceed $1 billion in April; Goldman Sachs disclosed a holding of $10.8 million in SOL ETF.

Net inflow for the entire quarter was positive.

Public Company Bitcoin Treasury Purchase Record

Strategy (MSTR) continued to aggressively accumulate 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 about $61.6 billion. Japanese listed company Metaplanet (3350.T) disclosed on January 1, 2026, that during this period it purchased 4,279 BTC at an average price of $104,638, totaling over $380 million; for the entire first quarter, it accumulated a total of 5,075 BTC, disclosing a total holding of 40,177 BTC as of April 2, with a purchase cost of around $400 million.

Strive (ASST) bought 123 BTC on January 13 at an average price of $91,561, totaling $11.3 million; it later completed an all-stock merger with Semler Scientific, after which the two companies hold a combined total of 12,798 BTC, making it the 11th largest corporate treasury. The merger was completed on January 16. By mid-March, Strive, through PIPE and the Semler merger, had accumulated approximately 13,628 BTC. DDC Enterprise (NYSEAM) only increased its holdings by approximately 600 BTC in January, and as of March 19, its total holding reached 2,383 BTC, valued at $182 million.

BSTR Holdings (led by Adam Back, operated by Cantor SPAC) announced it would go public using 30,021 BTC (worth $2.14 billion). Twenty One Capital (XXI) held 43,514 BTC (valued over $3.1 billion) as of April 2, making it the second-largest Bitcoin holder among public companies. Hyperscale Data (GPUS) held 663 BTC on April 21, entering at $50.3 million, with a target treasury scale of $100 million.

Ethereum and Staking-Related Corporate Treasuries

BitMine Immersion (BMNR) is currently the largest corporate treasury for Ethereum, having staked 74,880 ETH (approximately $219 million) through the MAVAN platform in the first quarter; during the week of April 20, 2026, it purchased 101,627 ETH (over $230 million), marking its largest single-week purchase of 2026. By April 20, the company held about 5 million ETH, with approximately 3.33 million of those staked, and an AUM of about $12.9 billion. SharpLink Gaming (SBET) is the second-largest Ethereum treasury, holding about 867,000 ETH (valued between $1.7 billion and $2.3 billion), nearly 100% of which is staked, disclosed on March 10.

Major Sellers

Bitcoin miners were net sellers in the first quarter as a whole. MARA Holdings sold 15,133 BTC for $1.1 billion between March 4 and 25 to repurchase convertible notes; Riot Platforms sold 3,778 BTC for $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) has gradually transferred about $42 million in BTC throughout the year. Strategy alone accounted for 94% of the net increase in BTC by all public companies in March.

Actions of Banks and Asset Management Institutions

Morgan Stanley did not just submit ETF applications; it applied for a national charter for a digital trust bank with the OCC in February 2026 and announced it would open BTC/ETH/SOL trading to retail customers via E*Trade/Zerohash.

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

Citi Group announced at the Strategy World conference on February 26 that it will launch institutional-grade BTC custody infrastructure. Standard Chartered launched institutional BTC/ETH custody services in Hong Kong in January and is reportedly negotiating to acquire 100% of its Zodia Custody stake (April 8).

Banco Bilbao Vizcaya Argentaria (BBVA) advised high-net-worth clients to allocate 3–7% of their assets to cryptocurrencies.

12 European banks (BBVA, BNP Paribas, ING, Swedbank, KBC Bank, Danske Bank, Swedish Bank, Catalonia Savings Bank, DZ Bank, DekaBank, LBBW, Banca Sella) established the Qivalis Euro Stablecoin Consortium based on the Fireblocks platform, compliant with the MiCA regulatory framework (April 21).

Vanguard Group opened third-party crypto ETFs to its $11 trillion platform's 50 million brokerage clients. Fidelity offers a 1% BTC allocation option in its 401(k) pension plans, reportedly attracting about $800 million.

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 (Fourth Quarter 2025 Holdings, disclosed in February 2026)

Goldman Sachs' crypto ETF holdings totaled about $2.36 billion, covering BTC ($1.06 billion), ETH ($1 billion), XRP ($152 million), SOL ($109 million), but BTC and ETH holdings were reduced by 39% and 27%, respectively.

Mubadala (Abu Dhabi Sovereign Wealth Fund) increased its IBIT holdings by 46% to 12.7 million shares (about $631 million), accumulating about 2,300 BTC against the market downturn.

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

Millennium increased its IBIT holdings by about 67% (approximately 8,100 BTC, making them 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 a position in ETH (3.87 million shares of ETHA, valued at $86.8 million). Dartmouth College became the fourth Ivy League school to enter the market.

On the reduction side: Brevan Howard drastically reduced its IBIT holdings by 85% (from 37.5 million shares to 5.5 million shares, equivalent to a reduction of about 17,700 BTC); Farallon reduced by 70% (about 2,800 BTC reduction); Tudor reduced by about 1,300 BTC; the DSA hedge fund halved its IBIT; Sculptor nearly liquidated FBTC (reduced by about 90%).

Sovereign Wealth Funds and Governments

Aside from Mubadala and Al Warda, the Luxembourg Sovereign Wealth Fund FSIL maintains a 1% Bitcoin allocation (about 8.5 million euros), becoming the first euro area sovereign wealth fund to support BTC. El Salvador continues its strategy of buying 1 BTC daily (currently holding 7,547 BTC, totaling about $635 million), and on January 29, it increased its gold reserves by $50 million. The Czech National Bank (which purchased in November 2025 and continued into 2026) remains the only central bank globally holding Bitcoin.

The U.S. Strategic Bitcoin Reserve has yet to increase. CoinDesk confirmed on March 6 that the Trump administration's executive order is "making slow progress"; the reserve still only holds about 328,372 seized BTC. Patrick Witt, a member of the White House Digital Assets Committee, reiterated the commitment, but no actual fund deployment has occurred so far. Among the states in the U.S., only Texas injected $5 million into IBIT in November 2025 (with another $5 million yet to be utilized). New Hampshire and Arizona have related legislation but have not deployed any funds yet. Reports continue to circulate about CalPERS planning to allocate 1% (approximately $500 million) to BTC, but CalPERS has not confirmed this officially.

Family Offices

Two surveys revealed starkly contrasting situations: JPMorgan's Private Bank 2026 Family Office Report indicates that among 333 surveyed institutions (average net worth $1.6 billion), 89% stated they have no Bitcoin allocations, with AI investment being the primary focus. The New York Mellon Wealth/NOIA survey shows 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 a typical allocation of 2–5%, about 5% for Asian institutions, and around 2–4% for U.S. and European institutions.

Part Two: Summary of Cryptocurrency Venture Capital Financing in the First Quarter of 2026

Financing for cryptocurrency venture capital in the first quarter of 2026 presented a paradox: the total amount of capital remained robust (down 8%-16% year-on-year), but the number of transactions plummeted by 49%. The most comprehensive statistics come from Crypto-Fundraising.info (as of April 1), recording a total of 222 transactions, with total financing of $6.81 billion; excluding mergers and acquisitions, pure VC financing amounted to 183 deals, totaling $4.77 billion. DefiLlama/DL News (April 4, only counting VC) tracked 53 transactions of over $10 million, totaling about $5 billion. JPMorgan estimates total inflow into digital assets in the first quarter to be around $11 billion, about one-third of the same period in 2025. The quarterly crypto VC report regularly published by Galaxy Research has not yet been released as of April 23 but can reference its benchmark data from the fourth quarter of 2025 (worth $8.5 billion/425 transactions).

Core Data

Compared to the first quarter of 2025 (VC financing of $5.37 billion, 358 transactions) and the fourth quarter of 2025 ($8.5 billion, 425 transactions), the total VC financing in the first quarter of 2026 was about $4.77 billion, a year-on-year decrease of 11% and a quarter-on-quarter decrease of 44%; the number of transactions was 183, a year-on-year plummet of 49% and a quarter-on-quarter decrease of 57%. Notably, the average single VC financing amount soared 76% year-on-year to $35.9 million (median $8 million), reflecting significant polarization: the seed round was the most active in terms of the number of transactions (37 deals, totaling $252 million), while the average size of four Series C financings reached as high as $108.8 million. Pre-Seed stage average was only $1.75 million, indicating that the middle-market is nearly shrinking.

Three Transactions Consumed Half a Quarter

This quarter’s financing presented a highly concentrated and severely backloaded characteristic. Only March alone produced $4.43 billion in financing (accounting for 65% of the entire quarter), while February ended with a meager $686 million.

The following three transactions alone totaled $3.4 billion, approximately half of the total disclosed financing for the quarter: the payment track acquisition target BVNK ($1.8 billion, March 17), the prediction market platform Kalshi (led by Coatue in a growth round, valued at $22 billion, $1 billion, March 19), and the strategic share acquisition by Intercontinental Exchange in Polymarket ($600 million, March 27).

The competition for the leading prediction market has intensified in the financing sector.

Other noteworthy large financings include: Rain (C round $250 million, stablecoin payment track, led by Iconiq/Dragonfly/Galaxy, valued at about $1.95 billion, January 9); BitGo completed its IPO on the NYSE, raising $213 million (January 22); XBTO strategic financing of $217 million (March 25); Flying Tulip token issuance $206 million (FDV $1 billion); Whop received $200 million investment from Tether (February 25); BlackOpal Latin America RWA financing of $200 million (January 8); Kraken/Payward completed a secondary market transaction led by Deutsche Börse, raising $200 million, valued at $13.3 billion; LMAX Group received $150 million investment from Ripple (January 15); Alpaca completed $150 million in Series D; Bluesky received $100 million in Series B led by Bain Capital Crypto (March 19); Anchorage Digital received $100 million investment from Tether, valued at over $4 billion (February).

Track Distribution: Payments and Prediction Markets Surpass DeFi

The star tracks of the 2021 bull market cycle—game finance, NFT, L1 infrastructure—have almost vanished from the top of the financing rankings.

• Payment/stablecoin track led with $2.39 billion (35%, 17 transactions);
• Prediction markets followed with $1.72 billion (25.2%, 11 transactions);
• Finance/CeFi ranked third with $835 million (12.2%, 25 transactions).
• RWA (real-world assets) financing totaled $284 million (4.2%, 7 transactions);
• Trading markets/platforms $255 million (3.7%, 2 transactions);
• Infrastructure/L1-L2 financing totaled $184 million (2.7%, 12 transactions);
• DeFi only managed $89 million (1.3%, 5 transactions);
• NFT/game finance/metaverse can be almost disregarded.

The top three tracks collectively absorbed 72% of the disclosed funding for the quarter.

Active Investment Institutions

Coinbase Ventures led with participation in 12 deals, more than twice the number of the second-placed investor. Following are: Tether (8 deals), Animoca Brands (7 deals), CMT Digital (6 deals), and a16z crypto, Castle Island, Big Brain, Galaxy Digital (5 deals each).

Most active funds in March

Traditional financial institutions entered the infrastructure track with rare intensity: Franklin Templeton participated in 4 deals; Intercontinental Exchange invested in Polymarket; Deutsche Börse took a stake in Kraken, and Castle Securities, Bain Capital, Sequoia Capital, and Alibaba also participated in relevant financing rounds in the first quarter. Geographically, the three largest financings (BVNK, Kalshi, Polymarket) and the BitGo IPO all came from the U.S., showing that U.S. capital's share in crypto VC continued at around 55% as in the fourth quarter of 2025.

Conclusion: Institutional Capital Shows a Dumbbell Structure

At the beginning of 2026, the institutional crypto investment landscape is undergoing a bifurcation.

On the buy side, institutions with long-term holding convictions, such as Strategy, BitMine, Metaplanet, Mubadala, and the BlackRock ETF system, are taking advantage of the market downturn to increase their positions, while tactical hedge funds (Brevan Howard, Tudor, Farallon) and most Bitcoin miners have turned to net sellers. During the first quarter, Strategy's Bitcoin buying alone nearly surpassed the total of all other public companies, and the buy quantity recorded during the week of April 13–19 set the third-largest record in history.

On the venture capital side, a similar polarization is taking place: super-large financing for payments and prediction markets continues to expand, while small and medium-sized projects are generally facing a financing drought. The changing leadership of the tracks—shifting from DeFi/NFT/game finance to stablecoins, prediction markets, and compliant CeFi infrastructures—indicates that the industry's growth engine is gradually shifting from speculative crypto-native narratives to transaction models closer to regulated fintech.

The current greatest uncertainty arises from the U.S. Strategic Bitcoin Reserve: despite official declarations over a year, actual fund deployment remains zero. If the National Defense Authorization Act creates funding paths in the second half of 2026, it will fundamentally restructure the market demand landscape. Until then, the true buyers are the corporate treasuries and sovereign wealth funds, not Washington.

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