The latest industry quarterly review reveals that the digital asset market continued to face downward pressure in the second quarter, marking the third consecutive quarter of declines for this asset class. This sets the longest streak of losses since the 2022 bear market. Market analysis indicates that the primary characteristic of capital flows this quarter was a significant shift of institutional capital toward AI-driven equities. Coupled with ongoing geopolitical uncertainty and massive outflows from spot crypto ETFs, these factors collectively suppressed market performance.
Bitcoin spot ETFs are regarded as a key barometer for observing institutional sentiment. Data shows that while these products recorded a net inflow of $2.02 billion in April, the situation reversed in the following two months, with net outflows of $2.41 billion in May and $4.29 billion in June respectively. The total net redemption scale for the second quarter reached $4.67 billion, setting the record for the largest single-quarter outflow since the launch of spot products in January 2024. Notably, the redemption scale in June alone also refreshed a historical high. Ethereum ETFs similarly recorded a net outflow of $690 million during the same period, indicating that institutional allocation willingness is cooling synchronously.
Price index performance further corroborates market weakness. The mainstream digital asset index fell 17.9% in the second quarter, while the Bitcoin price dropped 14.2% to $58,544. Unlike the first quarter, crypto assets failed to follow the rebound of broader risk assets in the second quarter. During the same period, the S&P 500 Index and the Nasdaq 100 Index rose 14.9% and 27.2% respectively, with funds clearly flowing into AI and technology stocks. Notably, gold also fell 14.2% in the second quarter, moving in tandem with the trend of digital assets.
Despite the overall weakening trend, differentiation within the market is intensifying. The broader market index fell by only 7.42% in the second quarter, performing significantly better than Bitcoin, with 15 components recording positive returns. Among them, NEAR rose 49.8% benefiting from the narrative surrounding private AI infrastructure, HYPE surged 77.6% driven by protocol revenue growth, and ZEC rose 60.1% due to renewed demand for privacy assets amid geopolitical uncertainty.
Progress at the on-chain and infrastructure levels continues. Solana captured nearly 80% of tokenized equity DEX trading volume in June, with platforms such as Backpack and xStocks shifting to this network due to its high throughput and low transaction costs. The supply of RLUSD on the XRP Ledger exceeded that of Ethereum for the first time in June, while Ethereum still dominates the total supply of real-world assets with a share of over 50%, continuing to play the role of an institutional tokenization settlement layer.
Looking ahead to the third quarter, the macro environment remains a key variable. Under the leadership of the new Federal Reserve Chair, the market expects the Fed to maintain interest rates unchanged in the third quarter, meaning limited space for loose expectations traditionally favorable for risk asset recovery. Regulatory developments may become the next catalyst. If relevant bills are passed, they are expected to establish a federal market structure framework for digital assets and further open up space for institutional participation. For the market, ETF capital flows remain the most direct indicator for judging whether institutional funds are flowing back into crypto assets.
