Bitcoin hovers around its 200-day moving average, with ETF flows stabilizing after a record outflow-driven correction. ETH’s price action is increasingly tied to sentiment, while macro forces dominate risk appetite. Meanwhile, TradFi’s appetite for digital assets is surging, as data presented by Meltem Demirors at DAS reveals CeFi now rivals DeFi in revenue generation.

CeFi vs. DeFi:

TradFi is no longer “coming” to crypto. It’s already here, and it’s eating very well. While crypto token holders and VCs are busy debating where value could accrue (is it the protocol? The wallet? The apps?), it appears TradFi is also taking a huge piece of the pie. That was the key argument of Crucible Capital’s Meltem Demirors’ thesis at the Blockworks’ Digital Assets Summit.

Based on Demirors’ data, projected 2025 revenue from centralized crypto companies is $9.1 billion (as measured by USDT + USDC net interest margins and ETF fees), just slightly ahead of the same projection for DeFi’s most successful revenue-generating protocols, at $9 billion.

— Donovan Choy

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Crypto market update

The crypto market is at an interesting crossroads. While showing some signs of bottoming 10 days ago near $77,000, BTC is in a period of high correlation with US markets, which are rolling over following this week’s FOMC meeting. Bitcoin and Ethereum have seen ETF flows stabilize alongside declining volatility, allowing macro forces to take center stage.

The past month saw record ETF outflows, coinciding with a -22% dip in BTC price. Nick at Ecoinometrics notes that every significant ETF inflow or outflow cycle has correlated with major price swings:

• The initial ETF launch drove BTC from $40k to $70k.

• A second wave of inflows in late 2024 pushed BTC to $110k.

• The recent outflow wave aligned with BTC’s -22% correction.

Now, ETF flows are leveling out, which could indicate a new accumulation phase if inflows return. "If flows turn positive in the coming weeks, it could mark the beginning of a new accumulation phase by professional investors," Ecoinometrics suggests.

Historically, Bitcoin halvings were the dominant narrative shaping price action. But the current cycle is breaking from precedent, Nick argues. Bitcoin is well below its historical post-halving growth trajectories, suggesting that supply-side factors are no longer the primary driver of price. Instead, institutional flows and macroeconomic conditions are playing a far greater role.

Ethereum: Sentiment over mindshare

Analysis out Friday from FalconX’s David Lawant highlights how ETH’s price correlates more with sentiment, while SOL’s price is driven by mindshare, based on Kaito sentiment data.

For SOL, “changes in mindshare can explain up to 36% of price variance,” and using a more sophisticated model, this jumps to 46%, Lawant wrote.

For ETH, the most significant statistical predictor is sentiment, not mindshare, with a causality test showing that sentiment can help predict future ETH price action. In other words, Ethereum’s price is more sensitive to narrative shifts.

Uncertainty remains

The Federal Reserve maintained its rate projections, giving risk assets a temporary reprieve, but not enough to reverse the crypto market’s downward momentum from the late-February breakdown below the 91,000 range.

Inflation risks remain, even as Fed Chair Powell revived the infamous “transitory” adjective to describe policymakers’ expectations when confronting tariff-induced inflation. The Fed has slowed measures of quantitative tightening, but that shouldn’t be mistaken for quantitative easing. Any shift in the stance toward a more hawkish outlook could hit crypto liquidity.

The bottom line is, after an anemic bounce attempt, BTC looks headed to chop around its 200-day moving average a bit longer before picking a direction and dragging the rest of the crypto market with it. Institutional flows may take a front seat going forward as macro conditions dictate risk appetite.

One bright spot in the news coming out of Blockworks’ Digital Asset Summit is that sentiment at TradFi institutions is much better than what we see in the crypto-native trenches — an unusual dichotomy. That’s due to the many real improvements on the regulatory front, ranging from the repeal of SAB 121, to late breaking news of Tornado Cash being removed from OFAC's SDN list — which may bode well for the future mainstreaming of DeFi protocols generally.

— Macauley Peterson

Total onchain stablecoin supply has continued to climb to all time-highs of $225.9 billion, about 5.3% over February’s supply, based on Artemis data.

Here is the state of benchmark stablecoin yields and more:

• Pendle’s sUSDe PT: 9.7%

• Sky Savings Rate: 6.5% APY

• Morpho’s MEV Capital's "Usual USDC" vaults: 17.6% APY on USDC

• Aave v3 core: 3.2% on USDC on Ethereum

• Kamino: 5% on USDC yields, 7.2% on USDS yields and 12.9% on FUSD on its main market

• Noble’s new USDN stablecoin: 4.2% APY

— Donovan Choy

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