Bitcoin Holds Above $78,000 as Spot ETF Flows Resume in April

Bitcoin closed Friday at $78,400 after climbing 5.8 percent over the prior five sessions. The move came against a backdrop of recovering ETF inflows, easing Middle East tensions, and stabilizing rate expectations ahead of the Federal Reserve meeting Wednesday. The same five-day window saw Ethereum gain 2.7 percent to settle above $2,300. Both prices remain below their early 2026 highs. Bitcoin is still down roughly 19 percent year to date and Ethereum is down about 27 percent across the same window. The price action this month suggests the worst of the Q1 selloff is behind the asset class for now.

The flow picture explains a lot of the move. Spot Bitcoin ETF inflows turned positive in mid April after a stretch of net redemptions through Q1. BlackRock's IBIT product, which holds the largest share of the spot Bitcoin ETF complex, posted three consecutive weeks of positive inflows ending April 24. Fidelity's FBTC and Bitwise's BITB have shown similar patterns. Combined assets across all spot Bitcoin ETFs in the US sit around $112 billion as of Friday's close. The peak earlier this year was $128 billion. The recovery is real but partial.

Institutional adoption is the structural story underneath the daily price moves. The 2024 ETF approvals have institutionalized crypto exposure for endowments, pension funds, and registered investment advisors who could not previously hold direct crypto. The plumbing is in place. The decision is now portfolio level. A sample of advisors surveyed by Cerulli Associates earlier this year reported that 24 percent now hold spot Bitcoin ETF positions for clients, up from 14 percent at the end of 2024. The same survey showed 7 percent of advisors holding spot Ethereum ETF positions, a smaller but growing footprint.

Ethereum-specific data carries its own signal. New users on the Ethereum mainnet rose 82 percent quarter over quarter in Q1, reaching about 284,000 new addresses. Total transactions hit a record 200.4 million for the quarter. The stablecoin supply on Ethereum reached an all-time high of $180 billion, much of it concentrated in USDT and USDC. The numbers indicate that the network is being used. Layer 2 ecosystems including Arbitrum, Base, and Optimism continue to absorb a growing share of transaction volume, which keeps gas costs on mainnet low and supports application activity.

The macro picture is neutral to constructive for the asset class. The Federal Reserve meeting Wednesday is widely expected to leave rates unchanged. Federal funds futures imply a 96 percent probability of no change. Powell's press conference will be parsed for tone on the path of cuts later this year. The PCE inflation report on Friday is expected to show a 0.2 percent month over month reading, in line with the Fed's slow disinflation narrative. Stable rates and falling inflation are a friendly backdrop for non-yielding assets including Bitcoin.

Geopolitics took a step back from center stage this week. The three-week extension of the Israel-Lebanon ceasefire, even with continuing strikes, has reduced the immediate risk of a Hormuz closure that would spike oil prices and rattle risk assets. Brent crude pulled back from above $103 earlier in the week to settle near $96. Lower oil and lower geopolitical premium have given risk-on assets like Bitcoin room to recover.

The retail picture is harder to read. Coinbase reported Q1 retail trading volume that was 18 percent below Q4 2025 and roughly half the Q1 2024 peak. Robinhood crypto volume showed a similar pattern. The retail bid that drove the 2024 rally is not back. The current rally is overwhelmingly an ETF and institutional story. That structure tends to produce shallower drawdowns and slower upside than retail-driven rallies, since the buyers are sticky and the sellers are price-conscious.

For an investor weighing crypto exposure, the practical questions are unchanged. How much do you want exposure to non-yielding, volatile assets in the context of your full portfolio? Position sizing matters more than entry timing. A 1 to 3 percent allocation to spot Bitcoin can play a role for some investors. Anything above 5 percent starts to dominate portfolio risk in ways most investors do not anticipate when they build the position. The asset class can move 30 percent in a quarter without notice.

What to watch next. Ethereum's Pectra upgrade rollout is expected to wrap by mid May, which could shift gas economics again. The Fed minutes from this week's meeting will publish three weeks out. Any move toward earlier rate cuts would support the asset class. The biggest single risk for the rest of Q2 is a renewed Hormuz incident that pushes oil above $110. That would tighten financial conditions and pull capital out of the higher-volatility corners of the market, including crypto.