Institutional and whale investors continued to accumulate crypto, despite the broader market shedding 3% in valuation, even as Bitcoin ETF inflows remained strong.
The total crypto market cap declined by approximately $120 billion on October 7, with Bitcoin dropping 2.4% and briefly falling below the $121,000 price level before rebounding to close at $121,368.23.
Despite this movement, crypto exchange-traded funds (ETFs) registered strong inflows, with whales following the accumulation.
Bitcoin, Ethereum, Other Crypto ETF Inflows Remained Strong During Downturn
US‑traded spot crypto ETFs captured over $1.3 billion in net inflows on October 7, according to data from Farside Investors.
Bitcoin ETF accounted for $875.6 million of total flows, while Ethereum ETF inflows saw $420.9 million. The Solana SSK ETF added $14.6 million.
Ethereum ETF crossed the $15 billion mark in cumulative inflows for the first time, as Bitcoin ETFs also registered a new record by surpassing $62 billion in total inflows.
Bloomberg ETF analyst Eric Balchunas reported on October 8 that BlackRock’s IBIT ranked first in weekly flows among all ETFs with $3.5 billion. The figure represented 10 % of all net flows into ETFs during the period.
All 11 original spot Bitcoin ETFs recorded positive inflows in the past week, Balchunas noted, even Grayscale’s GBTC.
Drivers of Institutional Demand for Bitcoin ETF
Bitwise CIO Matthew Hougan published a blog post on October 7 projecting record flows into Bitcoin ETFs during the fourth quarter.
He cited three primary catalysts for accelerated institutional adoption through year‑end.
Additionally, he mentioned Morgan Stanley’s Global Investment Committee published a report on October 1 titled “Asset Allocation Considerations for Cryptocurrency.”
The guidance permitted 16,000 advisors managing $2 trillion to allocate up to 4 % of client portfolios to cryptocurrency for risk‑tolerant investors.
The approval marked a reversal from prior policies that prohibited advisors from purchasing Bitcoin ETFs.
Wells Fargo implemented similar policy changes for advisors overseeing approximately $2 trillion in assets under management.
Hougan projected UBS and Merrill Lynch would follow with comparable guidance in the coming months.
He noted that pent‑up demand existed among advisors who had been awaiting platform approvals before allocating client capital to crypto.
The “debasement trade” emerged as the dominant investment theme for 2025. Gold and Bitcoin posted the strongest returns among major asset classes year‑to‑date.
JPMorgan released a major report on the debasement trade on October 1. The US money supply expanded 44 % since 2020 as governments pursued expansionary monetary policies.
Hougan observed that advisors sought to include top‑performing assets in year‑end client reports. Historical data showed double‑digit Bitcoin returns correlated with double‑digit billions in ETF inflows each quarter.
Bitcoin surged 9 % in the first week of October alone.
Whales Accumulate Amid Correction
The X profile focused on on‑chain data Lookonchain reported concentrated whale activity in a 12‑hour window amid the correction movement.
A whale withdrew 650 BTC worth $80 million from Binance. The wallet held 2,091 BTC valued at $257 million following the transaction.
A fresh wallet received 1,183 BTC worth $144 million from Galaxy Digital eight hours prior. A second fresh wallet received 500 BTC valued at $60.85 million from BitGo 12 hours earlier.
The transfers originated from institutional custody providers and exchanges.
As a result, whales accumulated over 2,300 BTC worth approximately $284 million amid the market correction.
The coordinated buying activity suggested institutional players viewed the price decline as an accumulation opportunity rather than a bearish signal.
Considering the recent trends and developments from traditional players, Bitwise projected that total 2025 inflows would surpass the $36 billion record set in 2024.
Lastly, Hougan estimated an additional $10 billion in net flows would occur during the remaining 64 trading days of the quarter.