Market Dives, but Institutions Stay Bullish

GM Anon!

It’s been a rough week—BTC slipped below $80K, ETH looks like it’s hanging by a thread, and just when the market needed a confidence boost, Nvidia posted its worst post-earnings performance in over six years. This isn’t quite the bull market many expected after Trump’s victory, and his stance on tariffs seems to be adding more uncertainty.

Despite the volatility and the current bearish macro outlook, don’t lose sight of the bigger picture. Regulation is relaxing, institutions are positioning aggressively, and the groundwork for the next major leg up is being laid. It might take longer than people hoped, but make no mistake—the firewood is being stacked. When it ignites, it’ll be massive.

TLDR

• Institutions remain bullish despite market volatility, with regulatory easing and capital positioning for the next leg up.

• Ripple is expanding into DeFi with compliance-focused features, a new token standard, institutional lending, and EVM compatibility coming in Q2 2025.

• Citadel is entering crypto as a market maker, improving liquidity and bringing more institutional capital into the space.

• MicroStrategy’s stock is down 50% since November despite holding 499,096 BTC, raising concerns over its $8.2B debt load.

• Pump.fun was hacked, highlighting the increasing risk of social media breaches in the crypto space.

• Dubai approved USDC and EURC as the first regulated stablecoins, accelerating institutional adoption in the UAE.

• Solana’s bot trading activity has dropped, while BSC has gained traction, though Solana still leads memecoin trading with 83% dominance.

• TVL is down across most major chains, with Ethereum and Solana seeing double-digit declines, while only Berachain and Sonic posted gains.

• Smart money holdings in both the Solana and Ethereum ecosystems have significantly decreased compared to a few months ago.

Current State Of Market

The crypto market just got absolutely nuked this week. Again. 

BTC dropped below $80K, wiping out a mind-blowing $1.55B in liquidations on Monday alone. If you thought this was just another Monday in the casino, think again. $1.37B of that total came from overleveraged longs getting their stops obliterated, while shorts barely took a scratch at $176M in losses. ETH and SOL weren’t spared either—ETH saw $297M in liquidations, and SOL got rinsed for $94.4M.

Bybit just topped the liquidation charts with $660M, Binance followed with $327M, and OKX wasn’t far behind at $189M. It’s been open season on overleveraged positions, and the exchanges are raking in the liquidation fees. 

The rest of the week followed a similar pattern, with traders attempting to time the bottom—only to trigger more liquidations. Monday stood out as the most brutal day.

Ripple’s Big Plans for XRPL in 2025

Ripple is making some big moves for the XRP Ledger (XRPL) in 2025, aiming to bring institutional DeFi into the mainstream. The roadmap focuses on making XRPL more programmable, compliant, and liquid—essentially turning it into a major player for banks and financial institutions looking to integrate tokenized assets and stablecoins.

Citadel Securities Jumps into Crypto

One of the biggest TradFi players, Citadel Securities, is officially entering crypto trading and market-making. Known for dominating equities and fixed-income markets, Citadel is now positioning itself to provide liquidity for major crypto exchanges like Coinbase, Binance, and Crypto.com.

This is a major shift—CEO Ken Griffin was once a vocal crypto skeptic, famously dismissing BTC as a "jihadist call against the dollar" in 2017. Now, Citadel sees an opportunity in crypto’s volatility and rising institutional demand.

By entering as a market maker, Citadel could:

• Improve liquidity and reduce spreads in crypto trading.

• Make the market more attractive to institutions, bridging the gap between TradFi and DeFi.

• Further legitimize crypto as an asset class, as more hedge funds and pension funds look for exposure.

With BlackRock, Fidelity, and others embracing crypto, Citadel’s move is just another step in the growing institutional adoption of digital assets.

Strategy’s Bitcoin Bet Under Pressure

MicroStrategy—now just “Strategy”—has built its identity around holding massive amounts of BTC. But despite BTC’s strong market performance, Strategy’s stock has taken a serious hit, dropping over 50% since November 2024. With 499,096 BTC in its reserves, the company is still profitable, but its massive $8.2B debt load is raising eyebrows.

If BTC were to crash below $44K, things could get messy for Strategy. Some analysts think the company might be forced to sell part of its holdings, while others believe it could survive by issuing more stock. CEO Michael Saylor, true to form, remains unfazed—he insists the company would just buy more BTC if prices dipped.

Pump.fun Hack: Another Crypto Security Scare

Another week, another hack. Solana-based memecoin platform Pump.fun got its X account hijacked on February 26, with scammers using it to promote a fake governance token called $PUMP. The hackers even went as far as to claim they’d delete the account if the scam token hit a $100M market cap.

Pump.fun quickly responded on Telegram, warning users to stay away from the fake token. But this is just another incident in a long string of social media breaches—Jupiter DAO and DogWifCoin have both been hit in recent months. The trend is a clear reminder that crypto security, especially on social platforms, is still a major weak spot.

Dubai Recognizes USDC & EURC as First Approved Stablecoins

While some regions are tightening regulations, Dubai is embracing crypto—USDC and EURC have become the first stablecoins approved under the DFSA's crypto framework.

This means institutions in the Dubai International Financial Centre (DIFC) can now integrate USDC and EURC for payments, treasury management, and more. With 6,000+ firms in DIFC, this could accelerate stablecoin adoption in the region.

Dubai’s move aligns with its broader pro-crypto stance, as the UAE pushes for clearer digital asset regulations. With stablecoins playing a crucial role in cross-border payments and DeFi, this could be a game-changer for crypto adoption in the Middle East.

Market Data Points

Solana's share of user bot trading has declined noticeably over the past two weeks, while BSC has made substantial gains.

Over the last 14 days, Solana's dominance in memecoin trading, based on bot trading activity, has remained strong at still approximately 83%, with around 330,000 traders actively participating.

Daily exchange volume has declined since the end of January and into February, which comes as no surprise given the cautious sentiment among users.

Despite challenging market conditions and recent major meme rug pulls, Pump.fun continues to generate significant revenue, securing the #9 spot in the top 10 over the past seven days

Most major chains have seen a decline in TVL over the past 7 days, except for Berachain (+3.88%) and Sonic (+13.59%), which posted gains.

Majors & Memes

Flows

Over the past 7 days, Base has seen the strongest inflows, with a net flow of +$20.6M, driven by $36.4M in inflows against $15.8M in outflows. While this shows Base is attracting liquidity while other chains struggle, these flows are much smaller compared to what we saw just a few weeks ago.

StarkNet and Avalanche C-Chain saw net inflows, which is surprising given the current market conditions, though their scale is much smaller compared to Base. Solana’s inflows have slowed massively compared to just a few months ago, highlighting a clear shift in momentum.

On the outflow side, Ethereum, Polygon, and Bitcoin are the biggest losers, showing that liquidity is rotating away from older, more established networks toward newer ecosystems like Base and StarkNet.

Cross-Chain Liquidity Trends – deBridge Analytics

Analyzing deBridge analytics, the biggest liquidity shifts are Solana to Ethereum, Ethereum to Arbitrum, and Base spreading out to multiple chains. Solana is seeing heavy outflows to Ethereum, suggesting traders are either cashing out or moving funds into Ethereum’s DeFi ecosystem.

At the same time, Ethereum is pushing significant volume into Arbitrum, reinforcing its dominance as one of the go-to L2s for DeFi. Base, despite its recent wave of inflows, is now seeing some capital rotate outward to chains like Polygon, BNB Chain, and Avalanche, likely as traders reposition or look for new opportunities. Meanwhile, Sonic and Bitrock are picking up minor but noticeable liquidity, hinting at early-stage speculative interest. 

Overall, the trends show a rotation from Solana to Ethereum, steady Arbitrum growth, and Base losing some of its recent liquidity surge as capital moves elsewhere.

Mindshare

The past seven days have been rough, and the mindshare data reflects that. AI projects are still leading the narrative at 33.61%, but they’re starting to cool off, with a noticeable dip after their recent surge. It’s a reminder that hype can only carry a sector so far before reality—liquidity, fundamentals, and market conditions—starts to weigh in.

DeFi, on the other hand, is showing resilience at 13.17%. While not as flashy as AI or meme coins, DeFi has staying power because it offers actual utility, especially when traders are looking for ways to generate yield in a cautious market. This suggests that while the overall market is struggling, DeFi isn’t fading away—it’s adapting.

Meme coins are hanging in at 11.61%, but with less enthusiasm than before. The speculative energy that fuels these plays is hard to sustain in a market where people are more risk-averse. If things turn bullish again, meme coins will likely explode back into focus, but for now, they’re holding on without much new momentum.

GameFi (6.48%) and RWAs (3.79%) are seeing slow but steady interest, likely from longer-term believers rather than short-term traders chasing pumps. EVM chains (4.48%) and Layer 2s (2.99%) aren’t getting much love right now, which suggests that while these sectors are crucial for the industry’s long-term growth, they’re not the hot topic at the moment.

DeFi Mindshare

Lastly, zoning in on DeFi, since it’s showing the most strength in this tough market, HYPE (15.01%) and BERA (9.95%) are leading the conversation, capturing the biggest share of interest. UNI (5.38%) and RAY (4.02%) are also seeing strong engagement, with RAY standing out as one of the few gaining traction.

Further down, ENA (2.41%), JUP (2.36%), and AAVE (2.28%) are holding steady, indicating that interest in major DeFi protocols hasn’t faded, even if no single project is dominating. LINK (1.82%), stETH (1.46%), USDE (1.42%), and JTO (1.37%) round out the middle tier, showing that both staking and stablecoin-related DeFi are still attracting attention.

The rest of the field, including Pendle (1.73%), PYTH (1.65%), CRV (1.26%), CAKE (1.26%), and LDO (1.22%), suggests that yield-related strategies and liquid staking protocols remain relevant, even if they aren’t top drivers of mindshare.

Overall, DeFi is proving to be one of the more resilient sectors, with key protocols maintaining attention while newer plays like HYPE and BERA dominate the conversation. This signals that while speculation is still driving narratives, core DeFi primitives continue to hold ground in this market.

Smart Money Accumulation 

Let’s summarize smart money holdings over the last seven days in the Solana ecosystem, as the market navigates a tough week of volatility and repositioning. While some tokens saw heavy accumulation, others experienced significant outflows as traders adjusted their positions.

Fartcoin was the biggest winner, skyrocketing 165.56% to $459.77K in total holdings, showing that speculative appetite is still alive despite broader uncertainty. MLG (+11.13%) and Fullsend (+13.76%) also saw steady accumulation, now sitting at $177.87K and $340.98K, respectively. These gains suggest that even in a choppy market, smart money is still finding opportunities in select plays.

However, the broader trend leaned toward de-risking and capital outflows. Jellyjelly took the biggest hit, plunging -57.56%, bringing its total holdings down to $192.48K, as smart money aggressively exited. Arc (-36.56%) also faced heavy selling, now at $617.09K, indicating a loss of confidence. Even TRUMP, which remains the largest position at $6.28M, saw a decline of -5.24%, though it still holds strong dominance. Meanwhile, AGI (-5.73%) and USA (-8.74%) also faced moderate reductions.

Overall, while there were some bright spots, the general trend suggests caution, with capital rotating out of several names. The surge in Fartcoin could be an exception rather than a signal of broader momentum, as most tokens saw net outflows rather than accumulation. It’s clear that smart money in Solana is treading carefully, waiting for clearer signals before making aggressive moves.

Unlike Solana, where we saw mixed flows, Ethereum’s smart money is leaning more toward accumulation, with several tokens seeing steady gains.

SPX was the biggest winner, surging 77% to a total of $224.47K, signaling strong conviction from buyers. Wojak (+14.03%) and Shrub (+13.53%) also saw impressive inflows, while DOGE (+11.14%) and Russell (+8.87%) continued to attract smart money interest. Bitcoin (+7.12%) on Ethereum also gained traction, now holding $168.11K, showing that even in uncertain conditions, capital is still moving into key assets.

Meanwhile, CULT remains the largest holding at $1.36M, posting a 5.8% gain, while APU (+3.66%) and JOE (+2.27%) saw smaller but consistent growth. VERTAI held flat at 0%, suggesting no major shifts in positioning for now.

Despite these inflows, smart money holdings in both the Solana and Ethereum ecosystems have dramatically lessened compared to just a few months ago. While Ethereum is still seeing accumulation, the overall scale of holdings has declined, reflecting a more cautious approach from large players. Liquidity is still rotating, but with less conviction than before, suggesting a shift in sentiment or a waiting period before the next big move.

That wraps up this post—we hope you found the insights valuable. See you next week, anon! 🚀