Important points
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In 2025, oil-related capital in the Gulf, including sovereign wealth funds, family offices, and private banking networks, has emerged as a major influence on Bitcoin’s liquidity dynamics.
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These investors are primarily entering Bitcoin through regulated channels such as spot ETFs.
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Abu Dhabi is at the center of this change, supported by a large pool of sovereign capital and the Abu Dhabi Global Market, which serves as a regulated hub for global asset managers and crypto market intermediaries.
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Oil-rich investors cite diversification, long-term portfolio construction, intergenerational demands within personal wealth, and opportunities to build supportive financial infrastructure as key drivers of this interest.
Since Bitcoin (BTC) began its first sustained boom in 2013, much of its big rally has been driven by highly leveraged retail activity and trading on lightly regulated platforms. Since the first Bitcoin exchange-traded fund (ETF) in the U.S., the ProShares Bitcoin Strategy ETF (BITO), began trading on October 19, 2021, Bitcoin has attracted even more attention from institutional investors.
In 2025, a new source of funding in the form of Gulf oil-related funds began to play a larger role in shaping Bitcoin’s market structure. This capital includes sovereign wealth funds, state investment companies, family offices, and the private banking networks that serve them.
These capital pools are entering the market through regulated channels, specifically spot Bitcoin exchange traded funds (ETFs). These inflows could trigger the next wave of liquidity. Rather than simply causing a temporary price increase, they may narrow the bid-ask spread, deepening the market, and allowing larger trades to be executed with less impact on prices.
In this article, we examine how investors connected to the oil economy can impact liquidity in the crypto market, outline what the next wave of liquidity will look like, and explain why these funds are interested in Bitcoin. It also highlights the practical limits of Abu Dhabi’s role and liquidity as a regulated hub.
Who are these oil investors and why are they important to market liquidity?
The term “oil-rich investors” refers to a network of capital managers whose resources are directly or indirectly tied to hydrocarbon revenues.
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Sovereign wealth funds and government-related entities in the Gulf. Oversees a large asset base and often shapes regional investment trends
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Ultra high net worth individuals and family offices. They can act more quickly than sovereign funds and typically drive demand through private banks and wealth advisors.
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International hedge funds and asset managers have set up operations in Abu Dhabi and Dubai, in part because of their proximity to regional capital.
An important factor when it comes to liquidity is not only the size of these allocations, but also how they are allocated. Many of these positions are routed through instruments and platforms designed for institutional investors that can support more robust market structures.
Did you know? Spot Bitcoin ETFs do not hold futures contracts. Instead, they store Bitcoin. This means that net inflows generally require purchasing BTC on the spot market, and investor demand is more directly tied to spot liquidity than derivatives-based exposure.
What the next wave of liquidity actually means
From a market structure perspective, liquidity waves typically have the following characteristics:
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Larger and more consistent daily inflows into regulated products rather than temporary spikes
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Deepening the order book and narrowing spreads in the spot market
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Increased primary market ETF activity, including share creation and redemptions (usually requires professional hedging)
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Stronger and more resilient derivatives markets, including futures and options, supported by regulated exchanges and clearing services.
The main difference from previous cycles is the maturity of the market infrastructure. Spot Bitcoin ETFs offer a regulated vehicle that is familiar to traditional investors. Meanwhile, prime brokerage services, institutional custodial services, and regulated trading hubs have reduced operational friction associated with large allocations.
Did you know? Authorized participants, rather than the ETF issuer, typically handle the buying and selling of Bitcoin associated with ETF flows. These large financial companies create and redeem ETF shares, hedge across spot and derivatives markets, and can impact day-to-day liquidity behind the scenes.
Conservative capital flows related to Abu Dhabi
Spot Bitcoin ETFs have become an easy route for these types of funds. The structure and risk profile of crypto ETFs, such as BlackRock’s iShares Bitcoin Trust (IBIT), differs from traditional registered funds. For investors focused on governance and compliance, these differences can be important.
During the third quarter of 2025, Abu Dhabi Investment Council increased its exposure to Bitcoin by expanding its position in IBIT. By Sept. 30, the fund had raised its stake from about 2.4 million shares to about 8 million, giving it a position worth about $518 million at the end of the quarter based on closing prices, according to regulatory filings.
These numbers suggest that Gulf-based capitals are gaining Bitcoin exposure through US-regulated listings. Even when implemented through simple ETF purchases, such inflows can support liquidity as market makers and authorized participants can hedge their exposures across spot and derivatives markets as flows change.
Why Abu Dhabi’s oil capital is interested in Bitcoin
There are several overlapping reasons why oil-rich investors are interested in Bitcoin.
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Diversification and long-term portfolio strategy: Gulf investors, particularly those associated with sovereign institutions, often seek long-term themes, diversification and global opportunities. Some institutions see Bitcoin as a potential long-term store of value in a manner similar to how gold is used in multi-asset portfolios, although Bitcoin’s risk profile and volatility are significantly different.
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Generational change in personal assets: Some asset managers in the UAE have reported growing client interest in regulated digital asset exposure, particularly among young high-net-worth investors. This has led traditional platforms to expand access through regulated products and venues.
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Building supporting infrastructure: Beyond direct allocations, some in the region are investing in crypto market infrastructure, including regulated exchanges, custody solutions, and derivatives platforms. These systems have the potential to reduce operational friction for institutional investors and support more durable liquidity over time.
Did you know? Many Spot Bitcoin ETFs use multiple custodians and insurance layers. This setting reflects the institution’s risk management standards and reassures conservative investors who never self-custody. private key.
Geography matters: UAE’s role as a regulatory hub
Where regulations, licensing, and trading institutions are reliable, liquidity tends to be concentrated. The UAE has created a multi-layered framework that combines federal oversight with specialized financial free zones such as the Abu Dhabi Global Market (ADGM).
Several developments support the position of ADGM as an organizational foundation. For example, Binance received regulatory approval under the ADGM framework.
According to a Reuters report, ADGM’s assets under management have been growing rapidly, which the report links to its proximity to Abu Dhabi’s sovereign capital pool. Concentration of market makers, prime brokers, hedge funds, and wealth platforms in one jurisdiction can support more continuous bidirectional flows, stronger hedging activity, and tighter pricing.
How oil-related capital can enhance Bitcoin liquidity
Inflows from sovereign wealth funds tied to the oil economy could introduce an additional layer of institutional demand into the Bitcoin market, which could support liquidity and market depth.
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ETF flywheel: Purchases by institutional investors through spot ETFs may result in the creation of shares, hedging activities, and related transactions by professional intermediaries. This can increase turnover and tighten spreads, especially if inflows are steady.
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Large-scale over-the-counter trading and prime brokerage: Large investors often prefer block trading and lending facilities to reduce their impact on the market. This allows intermediaries to deploy capital and improve their execution services.
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Regulated derivatives and clearing: A more developed and regulated derivatives ecosystem will improve price discovery and risk transfer. It also allows market makers to manage risk more effectively, potentially supporting market tightening in the spot market.
Did you know? Spot Bitcoin ETFs trade during stock market hours, while Bitcoin trades 24/7. This discrepancy can contribute to price differences at the stock market open, especially after large overnight movements or weekend volatility in the cryptocurrency market.
Withdrawal of institutional investors and limits on liquidity
Even if institutional investors participate, downside risk will not be eliminated. Bitcoin remains volatile, and even widely used products could see rapid outflows.
For example, Reuters reported that BlackRock’s iShares Bitcoin Trust (IBIT) recorded record net outflows of approximately $523 million in a single day on November 18, 2025, amid a widespread decline in the cryptocurrency market. The report cites factors such as profit-taking, waning momentum and changing preferences towards gold.
Access does not guarantee continued assignment. Liquidity flows in both directions, so the same infrastructure that supports large inflows also enables rapid outflows.
Governments also shape the regulatory environment. Changes in policy or oversight may expand or limit the ways in which a Fund can access Bitcoin-related products and, in some cases, Bitcoin itself.
