Figure 4. Bitcoin Realised Cap Net Position Change. Source: Glassnode)
This slowdown in realised cap growth underscores a softer appetite for risk at this stage of the cycle. While capital inflows remain positive, the muted trajectory reflects a more cautious investor base, contrasting with the aggressive demand that characterised previous ATH surges. All signals currently point to a healthy longer timeframe market backdrop, with BTC consolidating at present levels while capital inflows gradually extend further along the risk curve. Initially into ETH and, in due course, across a broader set of altcoins. For BTC specifically, we expect price action to remain range-bound for a while longer, even as ETH continues to attract heightened institutional demand mirroring the dynamic observed with BTC in early to mid-2024. Altcoins are beginning to see rotating liquidity flows, though we believe more significant capital rotation into higher-risk assets will only emerge later in the cycle. We do not anticipate a “rising tide lifts all boatsˮ environment until later in the year, when inflows into Bitcoin products regain momentum and new investment vehicles for altcoins are introduced. These products are likely to generate sustained, price-agnostic demand, creating the conditions for a broader re-rating across the digital asset complex.