Last week was shaping up as a clean institutional endorsement for crypto. Bitcoin attracted $1.42 billion in spot ETF inflows, marking one of the strongest allocation weeks since early fall. Ethereum followed with nearly $500 million, alongside record staking participation and rising network usage. Liquidity conditions improved, inflation data cooled, and rate markets leaned further into the idea of policy flexibility in 2026.
Those tailwinds defined the setup heading into the weekend.
By Monday, macro risk reclaimed the spotlight. President Trump’s escalation of tariff threats against multiple European nations triggered a broad risk recalibration. Bitcoin slid to $92,500, erasing weekend gains and unleashing $525 million in forced liquidations within an hour. Gold and silver surged to new records as capital rotated toward geopolitical hedges. Crypto absorbed the shock more efficiently than equities, though price action reflected its growing integration into global risk markets.
ETF flows signal durable institutional engagement
The ETF data from last week remains a critical signal. Bitcoin and Ethereum inflows were large, consistent, and concentrated in highly liquid products. Trading volumes exceeded $20 billion for BTC ETFs alone, reinforcing that allocations were strategic rather than speculative. These flows arrived while Bitcoin traded well above its Active Investor Mean near $87,700, a zone historically associated with consolidation phases rather than distribution.
That positioning matters as markets digest this week’s volatility. Institutional investors entering via ETFs tend to operate on longer horizons, and early-week drawdowns are now testing conviction rather than invalidating demand.
Ethereum’s supply dynamics continue to tighten
Ethereum’s fundamentals strengthened further beneath the surface. Transaction activity is nearing all-time highs, gas fees remain near historic lows, and stablecoins now account for roughly 35–40% of network usage. Staking participation has reached approximately 36 million ETH, close to 30% of circulating supply, steadily reducing liquid float.
With ETH ETFs drawing steady inflows and on-chain activity accelerating, Ethereum’s market structure increasingly reflects constrained supply meeting improving access. That dynamic places ETH in a favorable position if liquidity conditions remain supportive through the quarter.
Cross-asset signals frame the near-term environment
Last week’s surge in gold and silver highlights the current macro hierarchy. Traditional hard assets are pricing geopolitical fragmentation and policy uncertainty directly. Crypto continues to trade as a liquidity-sensitive asset, responding primarily to rates expectations, capital flows, and financial conditions.
As institutional adoption deepens through ETFs, Bitcoin’s correlation with growth-oriented assets remains elevated. That linkage helps explain the speed of Monday’s liquidation cascade and also frames how quickly sentiment can reverse if macro pressure eases.
The week ahead
Markets enter the new week focused on three variables:
- ETF flow persistence, especially whether BTC and ETH continue attracting capital through volatility.
- Trade policy signaling, with February 1 approaching as a key date for clarity or escalation.
- Rates market positioning, as investors reassess the durability of 2026 easing expectations.
Structurally, crypto remains supported by improving liquidity, institutional sponsorship, and strong on-chain fundamentals. Volatility is likely to stay elevated as macro headlines drive short-term positioning. The medium-term trajectory continues to hinge on whether policy risk stabilizes enough for capital to re-anchor around liquidity rather than geopolitics.
Podcast
Jito Foundation's Marc Liew on Why Institutions Are Turning to Solana
In our latest episode of Blockcast, host Takatoshi Shibayama sits down with Marc Liew, the head of APAC for Jito Foundation. Join us as we explore Marc's career journey from Ripple to Jito Foundation, delving into the evolution of payment systems and the transformative power of blockchain technology.
Tune in at blockcast.blockhead.co or on Spotify , Apple , Amazon Music , or any major podcast platform.
Blockhead is a media partner for Consensus Hong Kong 2026. Readers can save 20% on tickets using exclusive code BLOCKDESK at this link .
