Investors with abundant oil resources believe that diversification, long-term portfolio construction, the intergenerational demand for private wealth, and the opportunity to build supporting financial infrastructure are key factors driving this interest. Since Bitcoin's first sustained boom in 2013, its numerous significant rallies have been driven by highly leveraged retail activity and trading on less regulated platforms. Following the launch of the first U.S. Bitcoin exchange-traded fund (ETF), the ProShares Bitcoin Strategy ETF (BITO), on October 19, 2021, Bitcoin attracted more institutional investor attention. By 2025, a new source of funding will begin to play a greater role in shaping the Bitcoin market structure: oil-related funds from the Gulf region. These funds include sovereign wealth funds, state-owned investment companies, family offices, and the private banking networks that serve them. These liquidity pools are entering the market through regulated channels, particularly spot Bitcoin exchange-traded funds (ETFs). These inflows could drive the next wave of liquidity. They could not only lead to temporary price increases but also help narrow bid-ask spreads, increase market depth, and enable traders to execute larger trades with less price volatility. This article explores how oil-related investors influence cryptocurrency market liquidity, outlines the possible forms of the next wave of liquidity, and explains why these funds are interested in Bitcoin. Furthermore, this article highlights Abu Dhabi's role as a regulated hub and the practical limitations of liquidity. Who are these oil-related investors? Why are they so crucial to market liquidity? The term "oil-rich investors" refers to a network of capital managers whose resources are directly or indirectly linked to oil and gas revenues: Sovereign wealth funds and government-affiliated entities in the Gulf region manage vast assets and often dictate regional investment trends. Ultra-high-net-worth individuals and family offices act faster than sovereign wealth funds, typically channeling investment demand through private banks and wealth advisors. International hedge funds and asset management firms have established operations in Abu Dhabi and Dubai, partly due to their proximity to regional capital. In terms of liquidity, the key factor is not only the size of these allocations but also how they are deployed. Many of these positions are traded through tools and platforms designed specifically for institutional investors, which helps build a more robust market structure. What does the next wave of liquidity mean? From a market structure perspective, a wave of liquidity typically has the following characteristics: Larger and more stable daily inflows into regulated products, rather than short-lived surges. Deeper order books and narrower spreads in the spot market. Increased trading activity in primary market ETFs, including share creation and redemption, which often involves professional hedging operations. A stronger and more resilient derivatives market (including futures and options), supported by regulated trading venues and clearing services. A key difference compared to previous cycles lies in the maturity of market infrastructure. Spot Bitcoin ETFs offer traditional investors a familiar and regulated investment vehicle. Meanwhile, high-quality brokerage services, institutional custody, and regulated trading centers reduce operational friction for large-scale asset allocation. Conservative Capital Flows Related to Abu Dhabi: Spot Bitcoin ETFs have become a convenient investment avenue for such funds. The structure and risk profile of cryptocurrency ETFs, such as BlackRock's iShares Bitcoin Trust (IBIT), differ from traditional registered funds. These differences are crucial for investors focused on corporate governance and compliance. In the third quarter of 2025, the Abu Dhabi Investment Committee increased its Bitcoin investment by acquiring shares in IBIT. Regulatory filings show that as of September 30, the fund had increased its holdings from approximately 2.4 million shares to nearly 8 million shares, valued at approximately $518 million based on the quarter-end closing price. These data indicate that Gulf region funds are gaining exposure to Bitcoin through US-regulated listing channels. Even simple ETF purchases can boost liquidity as market makers and authorized participants can hedge risks in the spot and derivatives markets based on changes in fund flows. Why is Abu Dhabi interested in Bitcoin? There are several overlapping reasons why oil-rich investors are interested in Bitcoin: Diversification and long-term portfolio strategies: Gulf region investors, especially those associated with sovereign entities, typically seek long-term investment themes, diversification, and global investment opportunities. Some institutions view Bitcoin as a potential long-term store of value, similar to gold's use in multi-asset portfolios, although Bitcoin's risk characteristics and volatility differ significantly from gold.
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