Written by: SuperEx
Translated by: Plain Blockchain
The crypto market has recently become a battlefield of opposing viewpoints. Some analysts insist the bull market has arrived, while others believe we are merely lingering at the tail end of the previous cycle. Neither side has fully convinced the other, but data may provide a clearer perspective that sentiment cannot. Let's assess the current market temperature through the lens of capital flow.
According to SuperEx Research Institute's data, US crypto investment products saw a net inflow of $785 million last week, marking the fifth consecutive week of positive inflow and the first time the cumulative inflow in 2025 has exceeded $7.5 billion.
This stands in stark contrast to the massive capital outflows in February and March, when nearly $7 billion flowed out in just a few weeks. With continuous capital returning, questions arise: Are we witnessing the early stages of a true bull market?
Expectations of Policy Easing Strengthen, Reduced Policy Uncertainty Stimulates Risk Appetite
Since early May, the US and several major economies have released a series of "relaxed" signals regarding trade and monetary policies, restoring investor confidence in the overall policy environment.
On one hand, the White House's negotiation pace with major economic partners has slowed, alleviating concerns about potential trade conflicts. On the other hand, recent statements from Federal Reserve officials suggest that interest rates may have peaked, with market expectations of rate cuts later this year gradually rising. Against this backdrop of dual easing, volatility in traditional financial markets has decreased, prompting capital to again consider crypto assets as a viable allocation target.
Notably, the improvement in policy predictability played a crucial role. The enhanced liquidity of Bitcoin and Ethereum ETFs, along with a softening regulatory attitude in some regions, has boosted institutional investor confidence, leading them to re-enter the market and become the primary driver of the current capital inflow wave.
Capital Concentrated on Core Assets, Ethereum Ecosystem Highly Favored
This round of capital inflow shows a clear structural preference: mainstream assets dominate, with Ethereum attracting the most attention after Bitcoin.
Data shows Ethereum saw a net inflow of $205 million last week, the largest single-week increase in 2025 to date. From a technical perspective, recent network upgrades have significantly improved Ethereum's performance and scalability, further enhancing institutional confidence in its future role in DeFi, AI-integrated blockchain services, and Rollup infrastructure.
More importantly, Ethereum is increasingly viewed as a "supranational asset". It is not just a payment medium and collateral, but also serves as the underlying "fuel" for the Layer 2 ecosystem. Its value proposition is shifting from a single Token to critical infrastructure.
Investors now see Ethereum as the "digital sovereign bond" of the Web3 world - providing no yield but offering stability and liquidity similar to gateway-level assets. This shift in perception is the core reason for capital increasingly concentrating on Ethereum.
Is the Bull Market Really Back?
The key question is: Is this a true bull market or merely a relief rally?
The answer lies not in social media sentiment, but in the underlying mechanisms of capital allocation, user behavior, macroeconomic conditions, and technological momentum.
Institutional Inflow Indicates Confidence Returning
The most compelling evidence is the scale of institutional participation. The $785 million inflow in a week is not driven by retail investors. This liquidity comes from hedge funds, family offices, and asset management companies reallocating portfolios.
Moreover, the US is clearly leading, contributing $681 million of the total inflow this week. Germany follows with $86.3 million, and Hong Kong recorded $24.4 million in inflows. This indicates that institutional confidence is not a local phenomenon but a global one, albeit US-centric.
When institutional capital begins flowing into high-risk, high-return crypto assets during relatively geopolitically tense periods, it often serves as a forward-looking signal. These participants are not chasing FOMO but positioning themselves ahead of anticipated monetary policy shifts or technology adoption curves.
Macro Tailwinds Emerging
From a macro perspective, several factors are aligning:
Interest Rates Peaking: While the Fed has not yet pivoted to rate cuts, the market widely expects the tightening cycle to have ended. A stable or easing rate environment typically benefits long-term assets, including cryptocurrencies.
Geopolitical Risk Hedging: Temporary US-China tariff truce and uncertainty in traditional markets (such as stock market pressure and weakening dollar index) are driving investors towards alternative assets.
On-chain and Technical Indicators Warming Up
Beyond capital flow, on-chain activity also shows encouraging signs. Daily active addresses, Total Value Locked (TVL), and stablecoin supply are rising for Ethereum and its Layer 2 solutions (like Arbitrum and Optimism). Bitcoin's hash rate remains at historical highs, indicating miner confidence and long-term sustainability.
Meanwhile, leading indicators like the PI Cycle Top indicator and MVRV ratio have not yet signaled overheating, meaning the current rally has not reached a frenzied state.
Caution Still Needed
However, the market remains in a transitional phase, not full-blown hysteria:
Retail Participation Lagging: Google search trends for "Bitcoin" and "Ethereum" remain stable, indicating retail FOMO has not yet started, a hallmark of late-stage bull markets.
Altcoin Cycle Subdued: While Ethereum performs strongly, most Altcoins remain far below 2021 peaks. The market may continue to focus on mainstream assets until capital broadly rotates into mid and low-cap Tokens.
Structural Changes Support Long-term Bull Market Narrative
Beyond price charts and weekly inflows, the industry is undergoing fundamental improvements. Ethereum's Pectra upgrade, widespread ZK-rollup adoption, and continued development of Bitcoin Layer 2 solutions (like Lightning and Runes) are laying the groundwork for long-term scalability.
Simultaneously, Real World Asset (RWA) Tokenization is gaining institutional favor. Companies like BlackRock, Franklin Templeton, and JPMorgan are actively exploring blockchain-based traditional securities settlement. The convergence of traditional finance with crypto infrastructure suggests this is not just a seasonal rebound, but a multi-year bull market narrative.
In short, the current inflow wave is not merely speculative but supported by technological and institutional tailwinds.
Summary
So, is the bull market really back?
All signs point to a cautious "yes". We see sustained institutional inflows, macro headwinds turning into tailwinds, and key technical upgrades revitalizing foundational networks like Ethereum and Bitcoin. While the market has not yet entered a frenzied state - which is actually a good thing - it is clearly regaining strength.
For investors still on the sidelines, the next few weeks may be crucial. If inflows continue and the Altcoin market follows, the 2025 bull market may no longer be theoretical but become a reality.
