Data & Insights: 1inch Inching Back; Institutions Are Coming

Buying IBIT over BTC

• U.S. spot Bitcoin ETFs hit a 10 day positive streak on Wednesday, May 28th, with net inflows surpassing $4 billion. This sustained demand for ETF products presents a notable contrast to the broader landscape, where traditional crypto exchanges are experiencing more modest activity levels.
• Crypto exchanges globally recorded $1.47 trillion in trading volume for May, representing a significant decline from December's peak of $3 trillion and only barely breaking its 4-month downtrend.
  • Volume for ETFs however, has improved, with May recording $70 billion, a strong recovery from the low of $57 billion in March and challenging its December high of $83 billion.
  • This divergence may indicate a shift in how investors seek Bitcoin exposure, with regulated vehicles showing a preference over direct exchange purchases.
• The preference for ETF exposure appears driven by practical considerations rather than market sentiment alone.
  • Traditional brokerage accounts offer familiar infrastructure without the friction of KYC processes, exchange onboarding, or direct custody concerns that accompany direct crypto purchases.
• BlackRock's IBIT has emerged as the clear winner amongst the Bitcoin ETFs, capturing nearly 80% of volume market share. 
  • The ETF also maintained an impressive streak of inflows between April 14th and May 29th, marking a 34-day run.
• Despite current exchange volume declines, hopes are that this represents a temporary lull rather than permanent migration.
  • Exchange activity typically resurges when macro conditions stabilize and risk appetite returns, particularly for speculation on alternative cryptocurrencies unavailable through ETFs.
  • Early signs of renewed speculative interest are already emerging in certain sectors, though nothing approaching the intensity observed during December's peak activity levels.

1Inch Inching Back

• 1inch has orchestrated a dramatic comeback in the DEX aggregator space, capturing 60% market share in May 2025 after hitting a low of just 32% in March.
  • This turnaround coincides with the platform's strategic expansion to Solana, announced in late April as a direct play to capture the memecoin trading frenzy dominating that ecosystem.
• The Solana expansion has proven to be a brilliant move for 1inch, helping drive total DEX aggregator trade volume to an all-time high of $52 billion, with 1inch capturing $31.5 billion of that volume.
  • This represents a near-doubling of 1inch's market position in just two months, demonstrating how quickly competitive dynamics can shift in the aggregator space.
  • The timing aligned perfectly with Solana's continued dominance in new token launches, where 86% of tokens are still being deployed compared to Base's 10% share.
• 1inch's aggressive market share gains have come at the expense of competitors like CowSwap, Kyber, Paraswap, and Curve, who have all seen their relative positions compressed.
  • The success of 1inch's Solana strategy will likely force other aggregators to accelerate their own multi-chain expansion plans.
  • With memecoin trading continuing to drive significant volume and fee generation, competitors face pressure to establish a presence on Solana or risk further market share erosion.
• This market reshuffling highlights the increasingly competitive nature of DEX aggregation, where strategic positioning across the right ecosystems can determine market leadership.
  • 1inch's recovery from March lows demonstrates that market share in this space remains fluid and responsive to product development and expansion decisions.

Institutions Are Here for Your Coins

• Institutional appetite for Bitcoin continues to reach new heights, with large open interest holders of CME Bitcoin futures climbing to an all-time high of 217 as of the last week of May, up from approximately 160 at the start of the year. 
  • This 36% increase reflects a growing institutional conviction that Bitcoin serves as a reliable store of value amid mounting economic and geopolitical uncertainties.
• The metric tracks reportable traders holding at least 25 micro Bitcoin contracts (>2.5 BTC), providing insight into sophisticated investor positioning rather than retail speculation.
  • The sustained upward trajectory since early 2024 suggests institutional accumulation has become a consistent theme rather than opportunistic trading around specific events.
• This institutional buildup coincides with an accelerating trend of corporate Bitcoin adoption, highlighted by recent high-profile treasury announcements.
  • GameStop announced on May 28th that it would be adding Bitcoin to its balance sheet, joining a growing list of public companies viewing Bitcoin as a treasury asset.
  • Trump Media closed a private offering on May 27th, raising $2.32 billion specifically earmarked for Bitcoin purchases, representing one of the largest single corporate Bitcoin allocations to date.
• The timing of these moves also appears driven by escalating trade war tensions and policy uncertainty, with institutional investors increasingly viewing Bitcoin as a hedge against traditional financial system risks.
  • The president's tendency to make surprise policy announcements towards the weekend has created an environment where institutions seek assets uncorrelated with traditional geopolitical and monetary policy decisions.
  • Combined with sustained ETF inflows discussed earlier, the data suggests Bitcoin is transitioning from a speculative asset to a standard component of institutional portfolios.
• The steady climb in large holder participation indicates that institutions are treating Bitcoin allocation as a strategic decision rather than a tactical trade.

Hyperdominant

• Hyperliquid has recorded a new all-time high in monthly perpetual futures volume, facilitating over $284 billion in trading activity for May 2025.
  • This represents a 51.5% month-over-month (MoM) increase compared to April’s $187.5 billion worth of volume
  • For further context, exactly a year ago in May 2024, Hyperliquid facilitated just $26.3 billion in trading volume, representing an 843% year-over-year (YoY) increase.
  • This explosive growth underscores the protocol’s cemented position as the dominant player in the on-chain perps vertical, having successfully blended CEX-grade performance with native crypto rails.
• Meanwhile, the ratio of Hyperliquid to Binance’s monthly perpetual volume surged to a new record high of 10.54%, surpassing April’s previous peak of 9.76%.
  • For context, this figure eclipsed the previous monthly record high of 9.76% from just the month prior.
  • It serves as a proxy for relative dominance within the perp landscape, and Hyperliquid’s encroachment into Binance’s long-held dominance is becoming harder and harder to ignore.
  • The main drivers behind Hyperliquid's rising momentum against Binance is their UX that rivals its CEX counterparts without necessarily the same level of custody risk, as well as their season 2 points campaign, which have lured in traders following their highly successful and lucrative season 1 airdrop.
• These dynamics have also buoyed the ratio of total DEX to CEX futures volume as it continues to hover near record highs for the past several months.
  • For May 2025, the metric printed 6.84%, marginally below its all-time high of 7.06% in February.
  • Year-to-date, this figure has averaged 6.7%, establishing a new baseline far above historical norms.
  • In 2022, DEX futures captured under 2% of global perp flow. This figure doubled to over 2% throughout 2023, hit as high as 5.19% in mid-2024, and has now been steadily above 6.8% in 2025.
  • If this trend continues as DEX infrastructure keeps tightening spreads and integrating native stablecoin on-ramps, a double-digit share before the year ends seems plausible.

Remember These?

• French football (soccer) team Paris Saint-Germain won European football’s most elite competition, the UEFA Champions League, on Saturday, May 31, 2025, as it triumphed over Italian team Inter Milan
  • Both teams that featured in the final have official crypto fan tokens, represented by the tickers $PSG and $INTER
• These fan tokens were launched in partnership with Chiliz via Socios that allow holders to engage in light governance decisions, access exclusive team experiences and show digital support for their club
  • Though they often function more like branded loyalty points than investment-grade assets, they have historically behaved like high-beta micro-caps that move on sentiment rather than fundamentals.
• In the days leading up to the final, both tokens had already declined by a significant margin
  • The $PSG token had declined by 26% over the 3 days leading up to the final, while the $INTER token declined by 44% in the same period.
  • $PSG had a market capitalization of $25 million prior to the decline, and is currently sitting at $18.5 million
  • Meanwhile, $INTER had a $11.4 million market cap prior to the decline, as it currently sits at a $6.5 million market cap.
  • Fan tokens are illiquid and highly event-driven, as traders often front-run big fixtures and then de-risk into the actual result.
  • This was notably visible as even a victory did not stop $PSG from slipping further post-match as speculators cashed out into low liquidity.
  • With $CITY having dropped ~30 % the day after its 2023 Champions league win, and $PSG/$INTER showed similar pre-match weakness, the market appears to be internalising a pattern on major match catalysts.