Crypto Currents: Institutions buy as retail places bets on prediction markets

While retail sentiment shifts toward prediction markets amid a price correction, institutional investors and corporate treasuries are actively accumulating assets, viewing the current downturn as a buying opportunity. Stay up on the crypto news that matters with “Crypto Currents,” daily from The Fly. Join us at 2 PM ET for your essential briefing on the fast-moving world of cryptocurrency on FlyCast radio.

ARK AND STRATEGY BUY THE DIP AMID $1.7 BILLION IN ETF OUTFLOWS: Despite a bearish macro environment that saw bitcoin (BTC-USD) dip below $90,000, smart money is aggressively buying the correction. According to the fund’s trade notifications, Cathie Wood’s Ark Invest reported buying a total of $21.5M worth of shares in Coinbase (COIN), Circle Internet (CRCL), and Bullish (BLSH) on Friday. Simultaneously, (MSTR) added 2,932 BTC to its treasury last week for approximately $264M. In the Ethereum ecosystem, BitMine Immersion Technologies (BMNR) announced its largest purchase of 2026, acquiring 40,302 ether (ETH-USD) worth roughly $117M. This accumulation aligns with a Coinbase survey, which found that over 70% of institutional investors believe bitcoin is undervalued. These inflows contrast sharply with broader market sentiment as CoinShares reports that global crypto ETFs logged $1.7B in weekly outflows, the largest withdrawal since November.

TRADERS PIVOT TO PREDICTION MARKETS AS MINING HASH RATE SLIDES: As volatility fatigues retail traders, volume is shifting toward event-wagering platforms. Bloomberg reports that traders are fleeing to prediction markets following a $150B crash, a trend benefiting infrastructure providers like Robinhood (HOOD) and Coinbase. While trading infrastructure sees a pivot, physical infrastructure is battling the elements. CoinDesk reports that the bitcoin hash rate has slid due to a U.S. winter storm, though markets have largely shrugged off the disruption. In the payments sector, deal-making has hit a snag as CoinDesk also notes that Zerohash walked away from a potential takeover by Mastercard (MA) and is now in talks to raise $250M at a $1.5B valuation.

REGULATORY DELAYS CAP VALUATIONS AS SEC CONSIDERS XRP ETF: The regulatory environment remains a primary driver of valuation divergence. A new report from Benchmark suggests that delays in passing a U.S. market structure bill will likely cap valuation expansion for the broader crypto ecosystem this year. Meanwhile, in an interview, former industry titan Changpeng “CZ” Zhao told CNBC’s Squawk Box he will not return to Binance, though he remains bullish on a bitcoin supercycle for 2026.

PRICE ACTION: As of time of writing, bitcoin was trading at $87,902.00, while ether was trading at $2,917.21, according to price data from TipRanks.