In a week filled with market volatility and significant sell-offs in the crypto space, many institutional investors seem to have taken advantage of the dip in prices. The sell-off in bitcoin and ether wiped out a staggering $367 billion in value, coinciding with a downturn in Japanese markets. However, it appears that newbie crypto traders were not deterred, showing a willingness to buy the dip.

Spot ether exchange-traded funds (ETFs) witnessed net inflows of approximately $120 million this week, with a majority of traders swooping in on Monday and Tuesday when the second-largest cryptocurrency plummeted by 42% from its March price high. Although there have been negative net flows for spot bitcoin ETFs since Monday, demand began to reaccelerate later in the week, with over $245 million being added on Wednesday and Thursday, according to data from crypto analytics firm CoinGlass.

A significant turning point occurred when Morgan Stanley announced that it would allow its 15,000 financial advisors to pitch clients with a net worth above $1.5 million to buy funds issued by BlackRock and Fidelity, which includes spot bitcoin ETFs. As one of the world's largest wealth management firms, Morgan Stanley is the first major Wall Street player to take this step, indicating a potential shift in the industry. The bank currently holds approximately $270 million in spot bitcoin ETFs, as disclosed in its 13F filing.

The filing deadline on Wednesday will shed light on the overall exposure that banks and hedge funds have to these spot crypto products. As the pressure mounts, it is expected that other wirehouses and asset managers, who have been conducting their in-house due diligence, will soon follow Morgan Stanley's lead.

Although spot ether ETFs had a relatively lukewarm launch less than three weeks ago, with lower flows compared to the blockbuster debut of spot bitcoin ETFs in January, the market is gradually picking up momentum. The spot bitcoin funds currently hold assets under management worth $54.30 billion, while the spot ether funds manage $7.25 billion.

Throughout the week, the crypto market has closely followed U.S. equities, experiencing similar ups and downs. However, in the past few days, it has shown signs of stabilization and recovery. The combined market cap of all tokens has regained hundreds of billions of dollars since Monday and now stands above $2.1 trillion. Bitcoin reached an intraday high of nearly $63,000 on Friday, while ether was trading above $2,700 earlier in the day.

Furthermore, the news of a U.S. judge ruling in favor of Ripple in a legal battle against the U.S. Securities and Exchange Commission (SEC) has boosted positive sentiments in the crypto industry. District Judge Analisa Torres ordered Ripple to pay $125 million in civil penalties, which is significantly lower than the $2 billion sought by the SEC. Following this development, Ripple's XRP token experienced a 22% surge on Thursday.

While bitcoin and ether have made considerable recoveries from their Monday lows, they remain down for the week, with ether possibly heading towards its worst performance in nearly two years. Similarly, crypto-aligned stocks such as Coinbase, MicroStrategy, and bitcoin miner Riot Platforms have seen their shares post third straight weekly losses, demonstrating the correlation between digital assets and U.S. stocks.

As the regulatory landscape potentially shifts and market stabilization continues, the crypto market is poised for further developments in the coming weeks.