Key conclusions

• In 2025, Gulf oil-linked capital, including sovereign wealth funds, family offices, and private banking networks, has proven to have a significant impact on Bitcoin’s liquidity dynamics.

• These investors enter Bitcoin primarily through regulated channels, including spot ETFs.

• Abu Dhabi has become a focal point of this shift, supported by huge pools of government-linked capital and the Abu Dhabi Global Market, which serves as a regulated hub for global asset managers and cryptocurrency intermediaries.

• Oil-rich investors cite diversification, long-term portfolio construction, generational demand in private wealth and the ability to build supporting financial infrastructure as key drivers of this interest.

Since Bitcoin (BTC) began its first sustained rally in 2013, many of its major gains have been driven by highly leveraged retail activity and trading on less regulated platforms. After the first US-based Bitcoin exchange-traded fund (ETF), the ProShares Bitcoin Strategy ETF (BITO), began trading on October 19, 2021, Bitcoin has attracted more interest from institutional investors.

In 2025, a recent source of capital began to play a larger role in shaping the Bitcoin market structure: oil-linked funds from the Persian Gulf region. This capital includes sovereign wealth funds, state-linked investment firms, family offices and the private banking networks that serve them.

These pools of capital enter the market through regulated channels, most notably Bitcoin spot funds (ETFs). These inflows could trigger another wave of liquidity. Rather than simply causing ephemeral price increases, they can support tighter bid-ask spreads, greater market depth, and the ability to execute larger trades with less price impact.

This article examines how oil investors can influence cryptocurrency market liquidity, outlines what the next wave of liquidity might look like, and explains why these funds are interested in Bitcoin. It also highlights Abu Dhabi’s role as a regulated hub and the practical constraints on liquidity.

Who are these oil-linked investors and why do they matter to market liquidity

The term “oil-rich investors” refers to a network of capital managers whose resources are linked, directly or indirectly, to hydrocarbon revenues:

• Sovereign wealth funds and government-linked entities in the Gulf, which oversee huge asset bases and often shape regional investment trends

• Ultra-high net worth individuals and family offices that can move faster than sovereign funds and typically channel demand through private banks and wealth advisors

• International hedge funds and asset managers setting up operations in Abu Dhabi and Dubai, attracted in part by their proximity to the regional capital.

In the case of liquidity, the key factor is not only the size of these allocations, but also how they are used. Many of these positions are routed through vehicles and platforms designed for institutional participation, which can support a more resilient market structure.

Did you know? Spot Bitcoin ETFs do not contain futures contracts. Instead, they keep Bitcoin in custody. This means that net inflows generally require purchases of BTC in the spot market, linking investor demand more directly to spot market liquidity rather than derivative-based exposure.

What the next wave of liquidity actually means

From a market structure perspective, a liquidity wave is typically characterized by:

• Larger, more consistent daily flows into regulated products, rather than short-term spikes

• Deeper order books and tighter spreads in spot markets

• Increased ETF activity on the primary market, including the creation and redemption of shares, which is usually associated with professional hedging

• Stronger and more resilient derivatives markets, including futures and options, supported by regulated systems and clearing services.

The key difference from previous cycles is the maturing of the market infrastructure. Spot Bitcoin ETFs provide customary investors with a familiar, regulated instrument. Meanwhile, prime brokerage services, institutional depository services and regulated trading centers have reduced operational friction for large-scale allocations.

Did you know? Authorized participants, not ETF issuers, typically engage in the buying and selling of Bitcoin in conjunction with ETF flows. These huge financial firms create and redeem ETF shares and can hedge cash and derivatives markets, influencing day-to-day liquidity behind the scenes.

Conservative capital flows linked to Abu Dhabi

Spot Bitcoin ETFs have become a straightforward way to raise this type of capital. The structure and risk profile of cryptocurrency ETFs, such as BlackRock’s iShares Bitcoin Trust (IBIT), differ from traditionally registered funds. For investors focused on governance and compliance, these distinctions can be significant.

In the third quarter of 2025, the Abu Dhabi Investment Board increased its exposure to Bitcoin by expanding its position in IBIT. Regulatory filings show that the fund had increased its holdings from about 2.4 million shares to nearly 8 million by Sept. 30, with the position valued at about $518 million at the end of the quarter based on the closing price.

These numbers suggest that Gulf capital is gaining exposure to Bitcoin through U.S.-regulated listings. Even if implemented through a straightforward ETF purchase, such inflows can support liquidity as market makers and authorized participants can hedge exposure to cash and derivatives markets as flows change.

Why the oil-related capital of Abu Dhabi is interested in Bitcoin

There are several overlapping reasons why oil-rich investors are interested in Bitcoin:

• Diversification and long-term portfolio strategy: Gulf investors, especially those with ties to state-owned entities, often look for long-term themes, diversification and global opportunities. Some institutions view Bitcoin as a potential long-term store of value, in much the same way gold is used in multi-asset portfolios, although Bitcoin’s risk profile and volatility vary significantly.

• Generational changes in private wealth: Some wealth managers in the UAE are reporting growing client interest in regulated exposure to digital assets, especially among younger, high-net-worth investors. This has forced customary platforms to expand access through regulated products and facilities.

• Construction of supporting infrastructure: In addition to direct allocations, parts of the region are investing in cryptocurrency market infrastructure, including regulated exchanges, custody solutions and derivatives platforms. These systems can reduce operational frictions for institutional participation and can provide more sustainable liquidity over time.

Did you know? Many cash Bitcoin ETFs apply multiple custodians and layers of insurance. This setup reflects institutional risk management standards and reassures conservative investors who would never choose to go it alone private keys.

Geography matters: the role of the UAE as a regulated hub

Liquidity tends to concentrate when regulations, licenses and institutional counterparties are reliable. The UAE has built a multi-layered framework that combines federal oversight with specialized financial-free zones such as the Abu Dhabi Global Market (ADGM).

Several changes supported the positioning of ADGM as an institutional base. For example, Binance obtained regulatory approval under ADGM.

According to Reuters reportADGM has seen rapid growth in assets under management, which the report linked to its proximity to Abu Dhabi’s pools of state capital. When market makers, prime brokers, hedge funds and wealth platforms are concentrated in one jurisdiction, it can ensure more continuous two-way flow, stronger hedge activity and tighter pricing.

How oil-pegged capital can strengthen Bitcoin liquidity

Inflows from oil-linked sovereign wealth funds could introduce an additional layer of institutional demand in the Bitcoin market, which could support market liquidity and depth.

• ETF flywheel: Institutional purchases through cash ETFs may result in stock creation, hedging activity and related trading by professional intermediaries. This can raise volumes and tighten spreads, especially when inflows are steady.

• Gigantic OTC transactions and brokerage services: Major investors often prefer block trades and financial instruments to reduce market impact. This may encourage intermediaries to commit capital and improve execution services.

• Regulated derivatives and settlement: A more developed, regulated derivatives ecosystem can improve price discovery and risk transfer. It can also facilitate market makers manage risk more effectively, which could support tighter prices in the spot market.

Did you know? Spot Bitcoin ETFs trade during trading hours, while Bitcoin trades 24/7. This mismatch can contribute to price gaps at the opening of the exchange, especially after huge overnight moves or weekend fluctuations in cryptocurrency markets.

Institutional exits and liquidity limits

Institutional participation does not eliminate the risk of worsening the situation. Bitcoin remains volatile and even widely used products can see piercing outflows.

For example, Reuters reported that BlackRock’s iShares Bitcoin Trust (IBIT) saw record single-day net outflows of approximately $523 million on November 18, 2025, during the broader cryptocurrency market slowdown. The report cited factors such as profit taking, failing dynamics and a change in preference towards gold.

Availability of access does not guarantee continuity of allocation. Liquidity flows in both directions, so the same infrastructure that supports huge inflows can also support rapid exits.

Governments also shape the regulatory environment. Policy and regulatory changes may expand or restrict funds’ access to Bitcoin-related products and, in some cases, Bitcoin itself.