Data & Insights: ETFs See Over $1B In Inflows; Crypto Markets Send

Quick Take

• Data & Insights is a weekly series showcasing top charts from The Block’s Data Dashboard.
• This week, we’re taking a look at how last week's pump has shown up. We’ll also look at volumes across centralized and decentralized venues.

Bull Market Spirits

• Bitcoin and Ethereum gained over 23% and 30% in 3 days last week, in what was arguably one of the most violent price moves we’ve seen from bulls in over a year
  • The altcoin market, represented by the total crypto market cap excluding BTC and ETH, rose by ~13% in the same period.
  • Interestingly, in the 40 days preceding this move, Bitcoin had been trading within a 3% price range with historically low volume and volatility.
• The catalyst that triggered this move was related to macro/fiscal policy, rather than an isolated crypto-specific event.
  • Last Wednesday, the US Treasury Department announced it would double the size of its long-dated debt buybacks to $4B, essentially to curb rising yields, with the US30Y at its highest level since 2007.
  • This likely refueled the broader debasement narrative, with Gold posting a 4.5% gain that day.
  • Bitcoin’s move likely happened due to it being a similar scarce “hard” asset that benefits from currency debasement, with an added boost thanks to its previously compressed price action and likely short-heavy positioning.
• A second crypto-related catalyst also hit later that same day
  • U.S. President Trump, at a white house event, namedropped Hyperliquid specifically, stating they were working to bring Hyperliquid (and by extension perpetual futures) into the US "in a fully compliant and legal fashion."
  • HYPE proceeded to post a +17% gain that day, and is currently standing at all-time highs around $80 per.
  • LIT, the token of Lighter DEX, the second largest onchain perps platform, has also gained over 60% since.
• Worth noting that the price of Gold is up 7.5% YTD per the time of writing, while BTC is still down -12% YTD.
  • If this move in crypto was truly driven by the debasement narrative, BTC should theoretically continue to rise to “catch up” to Gold, or at the very least trade more aligned with Gold and against the dollar.

People Love Bitcoin ETFs

• In one of the many signs that we might be at the end of the bear market, Bitcoin spot ETFs posted their largest weekly inflows this year. The suite of ETFs pulled in a whopping $1.9 billion last week, with 9 of 12 ETFs posting net inflows. 
  • IBIT continues to lead the pack with $1.3 billion in inflows, followed by Fidelity’s FBTC and Ark’s ARKB. 
• The existence of ETFs this cycle is a marked difference from prior market cycles. Investors can allocate directly to Bitcoin through these vehicles in their traditional broker, removing the friction of transferring to crypto exchanges. The easier access that ETFs provide increases the pool of potential investors.
  • Spot Bitcoin ETF volumes as a share of total BTC spot volume have risen from 21% to 30% over the last month, suggesting a growing preference for ETFs over actual spot. 
• On the flip side, investors who allocate to crypto through ETFs may be less likely to expand down the yield curve. Altcoins, including many memes, still don't trade in ETF wrappers, so investors still rely on CEXs or onchain access if they want exposure to these tokens. 
  • Even with the ETF option, Ethereum and Solana are still traded through CEXs most of the time. The two major altcoins only pulled in $690 million and $30 million, respectively, despite stronger price performance than Bitcoin.

Return to Crypto

• Native crypto trading has snapped back against HIP-3 equity volume this week, breaking the months-long trend where equity volume ate into market share. 
  • Crypto token volume dropped as low as 25% market share before recovering to 95%. Again, this illustrates just how reflexive crypto can be when markets move in the right direction. 
  • The recent high was recorded through the weekend when HIP-3 volume is historically weak, so we’re watching to see how Hyperliquid’s equity markets react during the work week. 
• While the story has rapidly shifted back to crypto, the stretch of HIP-3 equity dominance has shown Hyperliquid’s product-market fit. It shows the platform can absorb demand shocks in both directions. 
  • By volume, HIP-3 continues to pull in impressive numbers. Last week saw nearly $20 billion in volume, led by the SP500 and XYZ100 markets and single-stock names like SpaceX and SKHX.

Loading Up the Exchanges

• Exchange volume has doubled in just 5 days last week, jumping off the yearly low and now trading through $37 billion. 
  • While it may feel like a doubling in volume is super impressive, we are still a far cry from the 12-month high of $105 billion set shortly after the 10/10 liquidations. 
  • Monthly volume tells a similar story, with $490 billion traded so far in August compared to $670 billion in July. Worth remembering, spot CEX volume now has to share with spot ETFs this cycle, whereas previously all demand would be funneled through a CEX. 
• The rise of crypto ETFs and digital asset treasuries may prove to be a headwind to CEX volume. The TradFi instruments allow for more derivatives and optionality while plugging directly into existing TradFi rails and infrastructure. 
  • However, demand for most altcoins will keep flowing to CEXs. Listing speed, trading pair depth, and tooling for smaller-cap tokens are advantages that ETF and DAT structures can't replicate.
  • A third force is pulling from CEX volumes this cycle. The sharp rise in adoption of decentralized exchange options like Hyperliquid and Lighter may also start pulling volume away from their centralized counterparts. 
• If markets continue to grow at their current rate, all instruments will benefit from the arms race to accumulate tokens.

Long Weekend

• Short liquidations across major exchanges hit $2.26 billion last Wednesday, the largest single-day figure in recent memory.
  • For context and scale, the figure was over 30x larger than the prior 30-day daily average.
  • On the day, Binance accounted for 41% of the total liquidations, with Hyperliquid at 34% and Bybit at 18%.
  • This was followed by another large short liquidation event on Friday, with $1.09 billion worth.
  • In total, the entirety of last week saw over $4.4 billion in short liquidations, a 12x increase compared to the prior week as BTC and ETH both posted double-digit percentage 3-day returns.
  • Many altcoins also gained over +50% at the same time.
• Conversely, the following Saturday saw $640 million worth of long liquidations, also the largest in recent memory, over 6x larger than the prior 30-day daily average.
  • This time, Binance accounted for 58% of the liquidations, followed by Hyperliquid and Bybit at roughly 15% each.
  • Although this long liquidation event was more of an intra-day liquidity flush rather than a trend reversal.
  • While BTC and ETH wicked by just -2% and -5%, respectively, many altcoins posted 15-20% down candles within minutes, though most proceeded to recover and even surpass their prior highs.
  • The thin weekend liquidity, alongside leverage built on long positions over the prior three days of gains and a single fast move down were enough to clear over $640 million in overleveraged positioning.