1.3% of All XRP Now Unavailable Amid US ETF Rally; Vitalik Buterin Surprises Market With New SHIB-Style Donation; Bitcoin to $126,000: Arthur Hayes on New BTC Price High – Morning Crypto Report

TL;DR

• XRP Liquidity Crunch: U.S. ETFs have sidelined $1.18 billion worth of XRP. While price action is sideways, the “empty” order books suggest high sensitivity to the next demand wave.
• Buterin’s Social Signal: A 64 ETH donation to animal welfare reaffirms Vitalik’s move toward “ideological” crypto use, reminiscent of his market-shaping 2021 SHIB burn.
• BTC Macro Catalyst: Arthur Hayes forecasts Bitcoin at $126,000, fueled by “hidden” fiat expansion as the US and China debase currencies to fund AI infrastructure.
• Crypto Market Outlook: Despite MARA’s 18% revenue drop and upcoming inflation reports, BTC holds $81,000, backed by $1.28 billion in May ETF inflows – confirming institutional “HODL” conviction.

Institutions quietly removed every hundredth XRP from circulation

A massive supply squeeze is unfolding this midweek across the U.S. spot XRP ETF market as funds methodically absorb XRP from free circulation. According to fresh SoSoValue data, total net assets across the funds have reached $1.18 billion. At XRP’s current price near $1.48, this means institutions have fully isolated around 1.3% of XRP’s entire supply.

Cumulative capital inflows now stand at $1.358 billion, which means that right now, more than 770-840 million XRP are effectively locked inside the vaults of Canary, Grayscale, Bitwise, and Franklin Templeton. This makes every hundredth XRP token quietly removed from the market.

The most telling part is that this total absorption of supply has not yet affected price action in any visible way. XRP continues its 80-day sideways drift inside the $1.3-$1.5 range. The late 2024 period already demonstrated that even during record ETF inflows, XRP price was still capable of falling 27%, confirming that coin absorption is happening privately and does not immediately impact order books.

However, once a global risk-on environment begins and a fresh wave of buyers floods the spot market, the absence of those 1.3% locked coins could trigger a severe supply squeeze. Pushing the price of XRP higher would become significantly easier because of the growing emptiness inside exchange order books.

“The SHIB Effect”: Vitalik Buterin sends 64 ETH to animal charity

Ethereum co-founder Vitalik Buterin made known this May afternoon that he transferred 64 ETH to an animal protection fund, accompanying the transaction with a manifesto about the progress of vegan cuisine and artificial meat technologies.

The market immediately recalled the famous meme-era precedent from five years ago involving the Shiba Inu coin, which reflected Buterin’s characteristic style of turning digital assets into real social change. Back in 2021, SHIB creators sent half of the entire token supply to Buterin as a publicity move.

Instead, he shocked the market by burning 90% of the tokens while donating the remaining 10% – worth around $500 million at the time – to India’s CryptoRelief fund. Since then, any direct charitable transfer from Buterin has been perceived as a declaration of his personal values rather than an attempt to satisfy speculative expectations.

The current 64 ETH transfer does not reshape the market in terms of scale, but it carries a deeper ideological message. Vitalik Buterin openly called on the crypto industry to pay more attention to “our non-human companions,” arguing that technological progress has made helping animals easier than ever before.

Washington and Beijing will finance Bitcoin’s rally to $126,000: Arthur Hayes

The current Bitcoin bull trend is not being driven by retail speculation but by forced hidden fiat expansion from the world’s largest economies, according to Arthur Hayes. In his new essay, “The Butterfly Touch,” Hayes stated that Bitcoin’s return to $126,000 is the inevitable conclusion of a massive macroeconomic transition.

According to the BitMEX founder, the geopolitical confrontation between the United States and China has transformed artificial intelligence, data centers, and semiconductors into national security assets. AI infrastructure spending (CAPEX) has risen so dramatically that technology giants can no longer finance it purely from profits.

As a result, both the U.S. and China are effectively forcing central and commercial banks to flood the sector with cheap credit. Hayes argues that regulators are now prepared to completely ignore inflation risks and continue expanding the money supply in order to preserve technological sovereignty.

The second catalyst behind this new money-printing cycle emerged after February 28, as instead of continuing to accumulate U.S. Treasuries, countries have started partially liquidating dollar reserves, redirecting capital toward the real economy.

To prevent the U.S. debt market from collapsing under declining foreign demand, the Federal Reserve and the U.S. Treasury will likely be forced to activate hidden liquidity mechanisms – expanding dollar swap lines and modifying banking regulations to facilitate Treasury absorption. Combined with stimulus measures from the People’s Bank of China, this could unleash another global wave of fiat currency debasement.

As a result, while trillions of dollars and yuan are still preparing to enter the market, Bitcoin has already completed its cyclical bottom near $60,000, front-running the future liquidity wave. Hayes believes the rally will become parabolic once BTC confidently secures a position above $90,000.

At that point, large option sellers and institutional short positions may be forced into emergency covering, potentially triggering a violent short squeeze toward $126,000.

Hayes himself remains positioned for “maximum risk” through his fund Maelstrom. His largest positions remain Hyperliquid and Zcash, while his newest strategic bet is NEAR Protocol. Hayes expects NEAR to benefit from the adoption of “intent-based” architecture and privacy infrastructure.

At the same time, Hayes warns that the AI bubble will inevitably burst. He expects this to happen closer to the 2028 U.S. election cycle, triggered by reckless technology IPOs and social unrest caused by rising electricity prices and job displacement.

But before that happens, Bitcoin may fully absorb the coming wave of fiat liquidity.

Crypto market outlook: Bitcoin, Clarity Act and the Fed

As of the second week of May, the crypto market has secured itself in a phase of moderate growth while waiting for fresh catalysts from the U.S. regulatory environment. Bitcoin is trading around $81,000, supported in part by the resumption of MicroStrategy’s BTC purchases through MSTR.

Key checkpoints:

• Bitcoin price outlook: Bitcoin continues to hold the $81,000 level. Demand remains stable even without Saylor-driven momentum as net inflows into spot BTC ETFs reached $27.29 million during the previous session, while cumulative inflows for May have already climbed to $1.28 billion.
• Clarity Act: The Senate Banking Committee introduced an updated version of the long-anticipated crypto act. The bill prohibits yield generation on stablecoins, while simultaneously protecting non-custodial DeFi developers from being classified as money transmitters. The markup vote is scheduled for this Thursday.
• Macroeconomic calendar: Consumer inflation (CPI) data is not the only reason for caution as financial markets are also preparing for the Producer Price Index (PPI) report on Wednesday, May 14, and retail sales data on Thursday, May 15.
• Corporate sector (MARA): Mining giant MARA Holdings reported an 18% decline in Q1 2025 revenue. Despite weaker financial results, the company reaffirmed its strategy of retaining mined BTC (HODL) as its primary reserve asset.