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@emptyblock
In crypto, institutional capital and retail capital typically move in waves. A surge of new institutional capital is followed later by a peak in retail trading. This happens in large part because institutional capital is usually orders of magnitude larger than retail capital, and focused almost exclusively on BTC and ETH. So institutional money flows into BTC and BTC price surges, which stimulates the rest of the crypto market and attracts retail traders. This chart shows net inflows to the BlackRock Bitcoin Trust ETF (IBIT), compared to pump.fun trading volume on Solana. The ETF inflows peaked on November 7th, the day after the election. Pump.fun volume peaked a few months later on January 23rd, 2025. This suggests that institutional inflows front-ran retail inflows, and had already cooled off by the time retail trading peaked.
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@emptyblock
It’s important to note that these ETF inflows are just a proxy for institutional capital, and represent a fraction of total institutional trading. But the true amount is hard to measure, and IBIT serves as a good proxy since it’s the largest, most liquid ETF
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Similar to pump.fun, Base trading volume also surged after ETF volume peaked. Base DEX volume peaked on January 20th, about two and a half months after the ETF inflows topped.
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