Crypto markets took a collective breath in May with volatility declining during the month for the Nasdaq Crypto IndexTM. This moderation in price swings, especially during a period of broader macro uncertainty, suggests the asset class is maturing with a more anchored market structure and a base of investors that better understands crypto’s opportunities and potential risks.
Ethereum (ETH), in particular, has been gathering steam. The dominant smart contracts platform has stood out as a relative outperformer with ETH climbing back to the $2,600 level after a 42% rise in May, marking a healthy rebound. As a result, the ETH/BTC pair, often seen as a barometer of relative momentum within the crypto ecosystem and a historical leading indicator of an altseason, began regaining force. This shift may reflect renewed interest in Ethereum and other smart contract platform's expanding use cases—including their growing role as the institutional infrastructure for stablecoins. We also have seen this interest reflected in ETH ETFs, which have seen increasing flows in recent weeks.
Ethereum ETFs inflows since inception
Stablecoins remain in the spotlight
Stablecoins, which depend on Ethereum and other smart contract platforms for their underlying infrastructure, have been a focal point in recent weeks—but in a markedly different context than the speculative-driven growth of previous cycles. Stablecoins have quickly become a leading use case for these smart contract platforms, now surpassing Visa and Mastercard in transaction volume.
And in May, two parallel developments signaled the growing institutional legitimacy of this segment. First, we saw accelerated progress on US stablecoin legislation and good bipartisan energy around defining and regulating these digital assets. This suggests that the market is poised to move from the gray zone into a more formalized environment, potentially as early as this summer if Congress can come to agreement. This clarity could unlock trillions in financial and payment rails innovation.
Second, a consortium of major banks began active discussions around launching a joint stablecoin. The idea of a unified, institutionally governed stablecoin from some of the largest banks in the world would’ve seemed highly unlikely even just a few years ago. But today, it’s on the table and could serve as a digital backbone for real-time settlement, liquidity management, and cross-border flows, positioning stablecoins as the novel programmable financial primitives for the institutional world. This week’s IPO of Circle, the issuer of USDC, the second largest tokenized dollar, with over $60 billion in market capitalization, is yet another testament of the very moment stablecoins are experiencing.
Corporate treasuries and crypto: The next frontier or unnecessary risk?
Beyond stablecoin developments, one of the more recent notable developments was the number of companies announcing they would hold BTC on their balance sheets, including GameStop and Trump Media, which announced a $2.5 billion capital raise to buy BTC. On the treasury side, activity is heating up as more companies aim to mimic the corporate bitcoin adoption approach sparked by Strategy.
May also brought the official launch of a company embracing ETH as a treasury asset. The firm aims to provide structured Ethereum allocations for institutional treasuries, positioning ETH not just as a programmable asset but as a store-of-value alternative that can generate on-chain yield while supporting broader digital finance initiatives. These crypto treasury allocations are still early and vary widely in size and intent, so it remains uncertain how they will be viewed by investors and the market more broadly.
Looking ahead
With these developments as a backdrop, we’re watching three key dynamics that are strengthening the investment case for broad exposure to crypto:
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ETH and BTC relative strength – Will ETH continue to gain momentum against BTC, or will BTC reassert dominance as macro narratives evolve?
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Stablecoin legislation progress – A finalized framework in the US could unleash a new wave of institutional adoption and product innovation, possibly bringing trillions of tokenized dollars to the market in the years to come.
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Treasury strategies – Will more firms follow the lead of new BTC-focused treasury platforms? And will this be a net positive or net negative for the space?
As we near the midyear point, it’s clear that 2025 continues to signal a new phase in digital asset adoption and institutional acceptance. We continue to believe that a thoughtful, long-term allocation to digital assets will be an increasingly important feature of investor portfolios, as crypto steadily access capital pools whose size is at least one order of magnitude larger than what seemed achievable just a couple of years ago.
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Notes from the CIO
