TL;DR

Bitcoin drops below $104K on U.S.-China tensions; ETF flows reverse; Texas, Pakistan launch Bitcoin reserves.

Highlights

• Bitcoin dropped below $104,000 after renewed U.S.-China tensions and Trump’s accusations, triggering $600M in long liquidations; key support levels are being monitored 1.
• U.S. spot Bitcoin ETFs saw $616M in outflows as BlackRock’s 52-day inflow streak ended; Ethereum ETFs gained $70M, suggesting rotation toward ETH and altcoins 3.
• BlackRock and public firms accumulated billions in Bitcoin and Ethereum in May; public companies bought 95,000 BTC in Q1, and Trump Media closed $2.3B to establish a Bitcoin treasury 214.
• Texas legislature passed a Strategic Bitcoin Reserve bill; Pakistan announced a government-backed Bitcoin reserve and allocated 2,000 MW for mining, despite IMF concerns 67.
• Canary Capital filed for the first U.S. staked spot Cronos (CRO) ETF; REX Shares and Osprey filed for ETH and SOL staking ETFs, aiming for mid-June launches via 1940 Act structures 45.
• Stablecoin market cap hit $250B, led by Tether and USDC ; Circle filed for IPO; Senate blocked the GENIUS Act that would have classified stablecoins as securities 16.
• Stripe began talks with major banks to integrate stablecoins for global payments, signaling further mainstream adoption 8.
• FTX began Phase 2 creditor repayments, distributing $5B in stablecoins via BitGo and Kraken 11.
• Google warned quantum computers could break 2048-bit RSA encryption in under a week, posing a threat to Bitcoin ’s cryptography; post-quantum migration roadmap released 17.
• Sui approved a $162M protocol upgrade to recover Cetus DEX hack funds; Cork Protocol lost $12M to fake tokens; Chainlink oracle triggered $500K in liquidations on a low-liquidity token 910.
• BNB Chain led DEX volume in May with $149B, saw an $8B market cap increase, AI tool launches, and a protocol fork 20.
• SharpLink Gaming established a $425M Ethereum treasury, filed to raise $1B; Yuga Labs sold Moonbirds NFTs to Orange Cap Games 1318.
• PEPE’s exchange supply hit a two-year low after a whale exited with $6.86M profit; token remains among top five by trading volume 12.

Commentary

Bitcoin ’s drop below $104,000 was driven by renewed geopolitical risk, specifically U.S.-China trade tensions and Trump’s statements, leading to significant liquidations and a decline in risk appetite 1. ETF flows reflected this sentiment shift: after weeks of strong inflows, U.S. spot Bitcoin ETFs saw their largest outflows to date, with BlackRock’s IBIT ending a 52-day inflow streak. Meanwhile, Ethereum ETFs posted continued inflows, indicating a possible rotation into ETH and altcoins as traders reassess risk and opportunity 3.

Institutional and corporate accumulation remains a key theme. BlackRock , Fidelity, and other public firms continued aggressive Bitcoin and Ethereum purchases throughout May 2. Trump Media’s $2.3B Bitcoin treasury and Texas’s passage of a Strategic Bitcoin Reserve bill highlight growing adoption at both the corporate and state levels 147. Pakistan’s move to establish a sovereign Bitcoin reserve, despite IMF warnings and ongoing legal ambiguity, underscores the global reach of these trends 6.

ETF innovation is accelerating, with new filings for staked spot Cronos , Ethereum , and Solana ETFs—some structured to bypass the standard SEC approval process—targeting launches as soon as mid-June 45. These developments could expand institutional access to staking yields and diversify ETF offerings beyond Bitcoin .

On the infrastructure side, the stablecoin market reached a $250B cap, with Circle ’s IPO filing and Stripe ’s stablecoin integration talks signaling further mainstream adoption 168. FTX ’s $5B stablecoin repayment adds to circulating liquidity, while BNB Chain’s surge in DEX activity and new AI tools point to continued DeFi and Layer 1 competition 1120.

Security remains a concern: Google ’s quantum computing warning highlights the need for post-quantum cryptography, while recent DeFi exploits on Sui and Cork Protocol, and issues with Chainlink oracles, reinforce the importance of robust protocol and oracle design 17910. Traders should monitor ETF flows, Bitcoin support levels, and developments in staking products and stablecoin regulation for near-term market direction.