Risk Appetite in Crypto Markets Sees Significant Surge
A noticeable increase in risk tolerance within both traditional and cryptocurrency markets has been observed this week, enabling U.S. cryptocurrency funds to reclaim capital lost during the market corrections of February and March. These funds have experienced inflows exceeding $7.5 billion within just one week.
Bitcoin Hits New Heights Amid Global Developments
The price of Bitcoin (BTC) surpassed its previous all-time high on May 21, shortly after President Donald Trump announced ongoing negotiations for a ceasefire between Russia and Ukraine in a post on May 19. This development appears to have positively influenced investor sentiment in the cryptocurrency market.
Warnings of Currency Debasement Prompt Calls for Crypto Investment
Raoul Pal, a well-known analyst and CEO of Global Macro Investor, has raised concerns about the potential for further debasement of fiat currencies, encouraging investors to increase their holdings in cryptocurrencies and non-fungible tokens (NFTs). He asserted that these assets may never be available at such low prices again, emphasizing their importance in preserving purchasing power during times of economic uncertainty.
### The Role of NFTs in Wealth Preservation
Analysts and industry experts suggest that cryptocurrencies and NFTs serve as effective tools for safeguarding purchasing power in an era characterized by significant currency devaluation. Raoul Pal emphasized the necessity of owning both cryptocurrencies and NFTs as essential components of a diversified investment portfolio. He described NFTs as one of the most reliable long-term stores of value, highlighting the opportunity to invest before the impact of network effects becomes apparent.
### NFT Investment and Wealth Diversification
Nicolai Sondergaard, a research analyst at Nansen, acknowledged the growing trend of NFTs and art becoming vehicles for wealth accumulation among the affluent. He described this trend as a natural progression for diversifying asset portfolios. For traders and investors with varying levels of wealth, NFTs also represent a speculative opportunity for future returns, bolstered by the strong sense of community surrounding these digital assets.
### U.S. Crypto Funds See Record Inflows in 2025
In a significant boost for the digital asset market, U.S.-based crypto investment products have attracted over $7.5 billion in investments within 2025. The last week marked the fifth consecutive week of net positive inflows, indicating a robust demand for digital assets. According to a report by CoinShares, investment products in the U.S. drew $785 million last week alone, following a turbulent period that saw nearly $7 billion in outflows during early 2024.
### Geographic Breakdown of Crypto Inflows
The majority of these inflows originated from the United States, which contributed $681 million, followed by Germany with $86.3 million and Hong Kong with $24.4 million. The resurgence in demand for cryptocurrencies can be attributed to the White House’s announcement of a 90-day pause on additional tariffs on May 12, resulting in a 24% reduction in import tariffs affecting both the U.S. and China. The day following this announcement, Coinbase noted a net outflow of 9,739 Bitcoin, valued at over $1 billion, marking the highest withdrawal recorded in 2025 and indicating a rising institutional interest, according to Bitwise’s André Dragosch.
### VanEck Set to Launch New Fund Targeting Web3 Projects
VanEck is preparing to launch a private digital assets fund in June aimed at investing in tokenized Web3 projects developed on the Avalanche blockchain. This fund, named the VanEck PurposeBuilt Fund, will be accessible only to accredited investors and will focus on liquid tokens and venture-backed initiatives in sectors such as gaming, financial services, payments, and artificial intelligence. Idle capital will be utilized for real-world asset products within the Avalanche ecosystem.
### Yield-Bearing Stablecoins Experience Explosive Growth
The market for yield-bearing stablecoins has expanded dramatically, now totaling $11 billion in circulation and constituting 4.5% of the overall stablecoin market. This represents a significant increase from just $1.5 billion and a mere 1% market share at the beginning of 2024. Pendle, a decentralized protocol that allows users to secure fixed yields or speculate on variable interest rates, has emerged as a leader in this space, accounting for 30% of the total value locked in yield-bearing stablecoins.
### Tether Surpasses Germany in U.S. Treasury Holdings
Tether, the issuer of the leading stablecoin USDT, has surpassed Germany in its holdings of U.S. Treasury bills, reflecting the advantages of a diversified reserve strategy that has enabled the firm to navigate the volatile cryptocurrency market effectively. Tether recently reported holding over $120 billion in Treasury bills, positioning it as the 19th largest entity globally in terms of T-bill investments. This achievement underscores Tether’s commitment to conservative reserve management and highlights its expanding role in providing dollar-denominated liquidity.
### Overview of the DeFi Market
Recent data from Cointelegraph Markets Pro and TradingView indicates that most of the top 100 cryptocurrencies by market capitalization finished the week positively. Worldcoin (WLD) emerged as the top performer, increasing by over 32%, followed closely by the Hyperliquid (HYPE) token with a rise exceeding 30%. As the DeFi landscape continues to evolve, we invite you to join us next Friday for more updates, insights, and educational content regarding this rapidly advancing sector.
