James Butterfill, Head of Research at CoinShares – Europe’s largest digital asset manager
The recent price rebound in Bitcoin is very encouraging, and what stands out is the positioning in the perpetuals market. Volumes between current levels and $80,000 are remarkably thin, which suggests that if momentum continues — likely driven by further positive developments around a potential Iran settlement and the broader boost in risk assets — the move higher could be swift.
Whale activity turning positive for the first time since October
A particularly notable signal this week is the return of whale inflows. After sustained selling since October 2025, we have now seen two consecutive weeks of net inflows from Bitcoin whales — the first time since last autumn. This aligns with the four-year cycle thesis we have been discussing and suggests the large holders may be nearing the end of their distribution phase.
Flows update
This week saw $417 million of inflows into digital asset investment products overall. The week actually started on a weak footing, with nearly $400 million in outflows, but sentiment reversed sharply. Bitcoin year-to-date inflows now stand at approximately $2.3 billion, while the overall figure sits at $2.77 billion — still short of the $3.5 billion peak, meaning we have not yet fully recovered the flow losses seen earlier this year. We have now recorded three consecutive weeks of inflows, which is a constructive trend.
Ethereum was the standout performer on the flows side, attracting $176 million this week and, importantly, pushing into net positive inflows year-to-date for the first time. This is a meaningful shift given how significantly Ethereum had been lagging Bitcoin in flow terms.
On the other side, Solana has seen notable outflows this week and this month, reflecting a broader downturn in sentiment around the asset.
Quantum computing: a recurring concern
The quantum threat continues to resurface. Google recently disclosed a more efficient method for executing Shor's algorithm, which in theory could accelerate the timeline for cracking Bitcoin's ECDSA cryptography. While this remains a distant prospect, it has generated concern. Our research team is publishing a piece addressing this topic.
On the solutions side, BIP 360 has been proposed as a way to quantum-proof Bitcoin, likely requiring a soft fork. A more controversial proposal, BIP 361, suggests freezing Satoshi Nakamoto's wallets and other addresses with vulnerable cryptography. This is unlikely to gain consensus, as freezing coins runs fundamentally counter to Bitcoin's ethos — but it may generate debate and press coverage given the divergence of opinions within the Bitcoin core developer community.
Macro backdrop
It has been a relatively quiet week on the macro front. The Producer Price Index came in below expectations, though — like CPI — it has yet to reflect the recent oil price moves, which should begin feeding through next month. With CPI remaining elevated, the futures market is now pricing in zero rate cuts for the remainder of the year, though these expectations can shift rapidly.
In that context, Bitcoin's resilience is remarkable. Since the onset of the Iran crisis, Bitcoin is up 17.4%, compared with declines in equities and a 7% drop in gold. This outperformance versus traditional asset classes reinforces the evolving narrative around Bitcoin's role during periods of geopolitical stress and macro uncertainty.
