Cwallet Weekly Express: Realized Cap ATH, ETF Inflows Surge, Volatility Lurks
With the BTC price climbing to a high of $105.345k, the renewed market strength has sparked a wave of capital inflows, with the realized cap climbing to an ATH value of $889B.
- The rebound in price has provided significant financial relief to market participants. At the recent low of $74k, over +5M BTC were held in an underwater position. This has collapsed to just +2M BTC, with over +3M BTC having returned to a state of profit.
- Demand from institutional investors across recent months has been lackluster, with the ETF complex experiencing its largest period of sustained outflows on record. This has markedly reversed in the wake of the recent market strength, with the ETFs recording over +$4.6B of inflows across the last two weeks.
- The market remains at a critical decision point, hovering just above the Short-Term Holder cost-basis. Additionally, a large cluster of coins resides around the spot price. Historically, this had led to increased market sensitivity and, by extension, elevated volatility potential.
- A broad-based contraction in volatility premium across all contract maturities is occurring, indicates that volatility expectations are quite subdued, reinforcing the view that the market may be undervaluing future volatility.
Bitcoin Liquidity Rises Amidst Market Rally
Last week, the Bitcoin market experienced a sharp rally, with the BTC price climbing to a high of $ $105.345k, its highest in over two months. Since then, it has pulled back slightly to trade at around $102.186k, before rallying back to $104.466k.
This market strength has sparked a renewed wave of capital inflows, and an uptick in liquidity flowing into Bitcoin. We can also see some investors opting to de-risk and take profit, distributing into the upward momentum.
One way we can quantify the change in network liquidity is via the realized cap metric, which calculates the cumulative net capital flows into a digital asset. The Bitcoin realized cap is now trading at an ATH value of $889B. The rate of capital growth has seen the realized cap increase by +2.1% over the last month.
Investor Profit-Taking Surges
The Net Realized Profit/Loss metric is calculated as the first derivative of the Realized Cap, allowing us to observe the magnitude of net USD denominated capital flows occurring each day.
A surge in profit taking can be observed in recent weeks, with the recent rally drawing in over $1B/day in net capital inflows. This points to initial indicators of a return of demand-side strength, allowing sellers to lock in profits, and speaking to buyers willing to pick up coins at the current market price.
Combined profit and loss volumes have risen to a value of $1B/day, with only 15% of trading days this cycle recording a larger value. This suggests an increase in investor activity and demand. Of note, the component of Realized Loss accounts for only 1-2% of the total.
Short-Term Holders and Market Sentiment
As the market approached the current local low of $74k, more than 5M BTC were held in an underwater position. However, this number has fallen to around 1.9M BTC. Over 3M BTC have returned to a state of profit, bolstering investor sentiment.
Short-Term Holders (STH) represent the lions share of underwater positions (83%). A powerful tool for assessing investor stress is the unrealized loss metric, which shows significant periods of elevated stress in August 2024 and early 2025. The rally has improved portfolio values and led to a shift in investor spending behavior.
Institutional Confidence: ETF Inflows Strengthen
The ETF complex saw the largest period of sustained outflows on record. However, with renewed confidence, over $4.6B flowed into the ETFs over the last two weeks alone.
The total AUM held within the US spot ETFs has now climbed to over 1.171M BTC.
Bitcoin Volatility Indicators Flashing
The 111DMA and the Short-Term Holder cost-basis are critical levels. The recent rally has cleared both and is attempting consolidation.
The Realized Supply Density has increased significantly, showing many coins were acquired in a tight price range, heightening sensitivity and potential volatility.
Implied volatility across 1-week to 6-month maturities has compressed. Very low IV tends to precede heightened realized volatility.
Options expiring as far out as March 2026 are priced with volatility premiums just above 50%.
Keynote Announcement: U.S. VP J.D. Vance to Speak at Bitcoin 2025
BTC Inc. announced on May 9 that U.S. Vice President J.D. Vance will speak at the Bitcoin 2025 conference on May 28. The event expects 30,000 attendees and millions of livestream viewers.
Confirmed guests include Bo Hines, Cynthia Lummis, Michael Saylor, Vlad Tenev, Adam Back, Jack Mallers, Dan Morehead, and Bill Miller IV. A Web3 roundtable with Eric and Donald Trump Jr. will also feature.
Global Bitcoin Holdings Update
- El Salvador: 6,166.18 BTC ($593M)
- Brown University: $5M in BlackRock ETF
- MicroStrategy: 155,450 BTC ($68,550 avg cost)
- Semler Scientific: 3,634 BTC (22.2% YTD ROI)
- Monochrome ETF: 350 BTC ($52.1M)
- BlackRock: 614,639 BTC ($58.07B)
- KULR: 716.2 BTC (197.5% YTD ROI)
- Thumzup: Increased BTC allocation to 90% of liquid assets
- Cango: 2,944.8 BTC (via $352M funding)
- Metaplanet: 5,555 BTC ($465M)
Institutional Endorsements Fuel Long-Term Bitcoin Value
BlackRock CEO Larry Fink forecasts Bitcoin surpassing $500,000 in 5–10 years. Currently, U.S. spot ETFs hold $118.59B AUM. ETFs increase traditional investor exposure and credibility.
Stablecoin Growth and Its Impact on Bitcoin
Citi projects stablecoin supply to grow to $1.6T–$3.7T by 2030. A corresponding Bitcoin price rise could reach $285K–$475K based on historical ratios. Stablecoin growth enhances liquidity and supports Bitcoin's price discovery, especially under crypto-friendly regulations.
Altseason 2025: Opportunity or Illusion?
Analysts signal the beginning of altseason. Mister Crypto suggests life-changing gains of up to 40% daily may become common. BlockchainCenter’s index hints at a shift from BTC dominance.
However, others are skeptical. 2Lambroz notes weak retail involvement. Moustache sees chart patterns echoing 2016 and 2020. Rekt Fencer mocks premature enthusiasm, pointing out 90% declines in many altcoins.
Market Sentiment and Global Optimism
Bitcoin hit $105K following news of positive U.S.-China trade talks and ceasefire progress between India and Pakistan. Ether and memecoins also rallied, showing renewed investor confidence.
According to Kronos Research CEO Hank Huang, global optimism and strong rallies across crypto assets signal risk-on sentiment.
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