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Author: Dilip Kumar Patairya, Source: Cointelegraph, Compiler: Shaw Bitcoin Vision
Key takeaways
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In 2025, oil-related capital from the Gulf region, including sovereign wealth funds, family offices, and private banking networks, has become an important factor affecting Bitcoin liquidity dynamics.
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These investors enter the Bitcoin market primarily through regulated channels, including spot exchange-traded funds (ETFs).
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Abu Dhabi has emerged as a focal point for this shift, backed by significant funding tied to sovereign wealth funds and the Abu Dhabi Global Market’s role as a regulated hub for global asset managers and cryptocurrency market intermediaries.
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Oil-rich investors believe diversification, long-term portfolio construction, generational demand for private wealth and the opportunity to build supporting financial infrastructure are key factors driving this interest.
Since Bitcoin first enjoyed a sustained boom in 2013, its many sharp gains have been driven by highly leveraged retail activity and exchanges on lightly regulated platforms.After the first Bitcoin exchange-traded fund (ETF) in the United States, the ProShares Bitcoin Strategy ETF (BITO), began trading on October 19, 2021, Bitcoin attracted the attention of more institutional investors.
In 2025, a new source of funding began to play a larger role in shaping the structure of the Bitcoin market: oil-related funds from the Gulf region.These funds include sovereign wealth funds, state-owned investment companies, family offices and the networks of private banks that serve them.
These pools are entering the market through regulated channels, particularly spot Bitcoin exchange-traded funds (ETFs).These inflows could fuel the next wave of liquidity.Not only do they provide temporary price increases, they may also help narrow bid-ask spreads, increase market depth, and enable traders to execute larger trades with smaller price shocks.
This article explores how investors tied to the oil economy impact liquidity in cryptocurrency markets, outlines what the next wave of liquidity may look like, and explains why these funds are interested in Bitcoin.Additionally, the article highlights Abu Dhabi’s role as a regulated center and the practical limitations of liquidity.
Who are the oil-related investors?Why is it important for market liquidity?
The term “oil tycoon investors” refers to a network of capital managers whose resources are directly or indirectly tied to oil and gas revenues:
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The Gulf’s sovereign wealth funds and government-related entities manage vast assets and often shape regional investment trends.
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Ultra-high-net-worth individuals and family offices are moving faster than sovereign wealth funds, often directing investment demand through private banks and wealth advisers.
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International hedge funds and asset managers have set up operations in Abu Dhabi and Dubai, attracted in part by proximity to regional capital.
When it comes to liquidity, the key factor is not just the size of these capital allocations, but also how they are deployed.Many of these positions are traded through tools and platforms designed for institutional investors, which contributes to a more robust market structure.
What the next wave of liquidity means
From a market structure perspective, liquidity waves usually have the following characteristics:
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Daily inflows into regulated products are larger and more consistent rather than fleeting surges.
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Spot market order books are deeper and spreads are tighter
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Primary market ETF trading activity has increased, including share subscriptions and redemptions, which often involve professional hedging operations.
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Stronger, more resilient derivatives markets, including futures and options, supported by regulated trading venues and clearing services.
A key difference compared to previous cycles is the maturation of market infrastructure.Spot Bitcoin ETFs provide traditional investors with a familiar and regulated investment vehicle.At the same time, high-quality brokerage services, institutional custody and regulated trading centers reduce the operational friction of large-scale asset allocation.
Conservative capital flows related to Abu Dhabi
Spot Bitcoin ETFs have become a convenient way to invest such funds.Cryptocurrency ETFs like BlackRock’s iShares Bitcoin Trust (IBIT) have a different structure and risk profile than traditional registered funds.For investors concerned about corporate governance and compliance, these differences are critical.
In the third quarter of 2025, the Abu Dhabi Investment Council increased its investment in Bitcoin by increasing its stake in IBIT.Regulatory filings show that as of September 30, the fund has increased its holdings from about 2.4 million shares to nearly 8 million shares, a position worth about $518 million based on quarter-end closing prices.
The data suggests that funds in the Gulf are gaining exposure to Bitcoin through U.S.-regulated listings.Even through simple ETF purchases, such inflows can boost liquidity as market makers and authorized participants can hedge risks in spot and derivatives markets based on changes in flows.
Why Abu Dhabi is interested in Bitcoin
There are multiple and overlapping reasons why oil tycoon investors are interested in Bitcoin:
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Diversification and long-term portfolio strategies: Investors in the Gulf region, especially those associated with sovereign entities, often 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 profile and volatility differ significantly from gold’s.
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Generational shifts in private wealth: Some wealth managers in the UAE have reported growing client interest in regulated digital asset investments, particularly among younger high-net-worth investors.This has prompted traditional platforms to expand investment access through regulated products and channels.
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Build supporting infrastructure: In addition to direct investments, some institutions in the region are investing in cryptocurrency market infrastructure, including regulated exchanges, custody solutions and derivatives platforms.These systems can reduce operational friction for institutions to engage and potentially support more durable liquidity over time.
Location matters: UAE’s role as regulatory hub
Liquidity tends to be concentrated when regulatory, licensed, and institutional counterparties are reliable.The UAE has established a multi-layered framework that combines federal regulation with financial free zones such as the Abu Dhabi Global Market (ADGM).
Several developments have solidified Abu Dhabi Global Market’s (ADGM) position as an institutional trading platform.For example, Binance received regulatory authorization under the ADGM framework.
According to Reuters, Abu Dhabi Global Market’s (ADGM) assets under management are growing rapidly, which the report pointed out is closely related to its proximity to Abu Dhabi’s sovereign capital pool.When market makers, premium brokers, hedge funds and wealth management platforms are brought together in the same jurisdiction, it facilitates smoother two-way capital flows, stronger hedging activities and more accurate pricing.
How Oil-Related Capital Boosts Bitcoin Liquidity
Inflows from sovereign wealth funds tied to the oil economy could introduce additional institutional demand into the Bitcoin market, which could help enhance market liquidity and depth.
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ETF flywheel effect: Purchases by institutional investors through spot ETFs can trigger share subscriptions, hedging activities, and related transactions by professional intermediaries.This increases volume and narrows spreads, especially if inflows are steady.
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Bulk OTC trading and institutional brokerage: Large investors usually prefer bulk transactions and financing services to reduce market shocks.This can prompt intermediaries to invest capital and improve execution services.
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Regulated Derivatives and Clearing: A more complete, regulated derivatives ecosystem could improve price discovery and risk transfer.It can also help market makers manage risk more effectively, which may help the spot market form more accurate quotes.
Institutional exits and liquidity constraints
Institutional participation does not eliminate downside risks.Bitcoin remains volatile, and even the widely used product can see significant outflows.
For example, Reuters reported that during the overall correction in the cryptocurrency market, BlackRock’s iShares Bitcoin Trust (IBIT) set a single-day net outflow of approximately $523 million on November 18, 2025.The report pointed out that factors such as profit-taking, weakening market trends and a shift in investor preference to gold were the reasons for the capital outflow.
The ease of capital inflow does not guarantee the continued distribution of funds.Liquidity flows in both directions, so the infrastructure that supports large inflows can also facilitate rapid outflows.
Governments also influence the regulatory environment.Policy and regulatory changes may expand or limit financial access to Bitcoin-related products and, in some cases, even affect access to Bitcoin itself.
