Coinbase Institutional has adopted a neutral market outlook for the second quarter, citing unpredictable macro conditions driven by geopolitical tensions, particularly the conflict in Iran. The platform highlighted that this has disrupted expectations for fiscal and monetary stimulus, pushing investors toward cash. According to Coinbase, Bank of America's Fund Manager Survey showed cash holdings rose almost one percentage point to 4.3% in a single month, marking the fastest accumulation of 'dry powder' in five years. Regulatory developments and quantum computing advances have been overshadowed by this geopolitical noise.
Despite the cautious stance, Bitcoin has demonstrated relative resilience, with Coinbase noting a one-standard-deviation decline for BTC compared to the S&P 500's three-to-four sigma drop over the same period. Bitcoin recently rallied to as high as $72,000. U.S. spot Bitcoin ETFs closed Q1 with around $500 million in net outflows, Bitcoin's worst first-quarter performance since 2018, ending the period down nearly 24% from January highs. However, March saw a significant rebound with $1.32 billion in inflows.
On April 6, U.S. spot Bitcoin ETFs recorded approximately $471.4 million in net inflows, their strongest single-day intake in over six weeks, according to Farside Investors. BlackRock's IBIT led with $181.9 million, followed by Fidelity's FBTC at $147.3 million and ARK Invest's ARKB at $118.8 million. This marked the sixth-largest daily inflow total of the year. Institutional ownership of these ETFs now accounts for an estimated 38% of total assets, up from 24% a year earlier, with hedge funds, pension funds, and registered investment advisers collectively holding over $40 billion in shares.
Coinbase serves as prime broker and custodian for many of these ETFs, placing it at the center of these institutional flows. Further institutional momentum is expected as Morgan Stanley's Bitcoin ETF is set to go live on April 8 via an NYSE listing, making it the first major U.S. bank to issue a spot Bitcoin ETF directly.
Concurrently, MicroStrategy resumed its Bitcoin accumulation, purchasing 4,871 BTC for approximately $329.9 million at an average price of $67,718 per coin. This brings the company's total holdings to 766,970 BTC, acquired at a blended average cost of $75,644. The buying resumed after a brief pause following 13 consecutive weeks of accumulation.
Market sentiment was also buoyed by reports of potential ceasefire talks between the United States and Iran, which could ease geopolitical risk and benefit risk assets like cryptocurrencies. Analyst Michaël van de Poppe noted Bitcoin's price action showed signs of improvement, with $71,000 acting as a crucial resistance level that was recently broken. He outlined potential upside targets between $76,000 and $79,000, with a further level at $86,000 if momentum continues.