Bitcoin dropped 28%, but institutional investors seized the opportunity to purchase.

• Spot crypto ETFs show that many investors bought the dip this week.
• The crypto market mirrored the volatility of U.S. equities as tokens followed their unpredictable movements.
• Next read on spot bitcoin ETF exposure comes Wednesday with 13F filing deadline.

The crypto markets are tranquil as the weekend approaches, despite a tumultuous week that challenged how novice institutional investors would cope with the extreme price fluctuations that experienced seasoned digital currency investors.

The selloff in bitcoin and ether wiped out $367 billion in value earlier this week, just as markets in Japan were nosediving. However, it appears that these newbie crypto traders were eager to buy the dip.

This week, ether exchange-traded funds experienced net inflows of approximately $120 million, with the majority of traders purchasing on Monday and Tuesday when ether was down 42% from its March high of over $4,000.

Despite negative net flows for spot bitcoin ETFs since Monday, CoinGlass data reveals that demand accelerated mid-week, with spot funds adding over $245 million on Wednesday and Thursday.

On the day that Morgan Stanley approved its financial advisors to promote spot bitcoin ETFs to clients with a net worth over $1.5 million, hundreds of millions of dollars began flowing into these funds.

One of the world's largest wealth management firms, the bank, is the first among the big players on Wall Street to take a step towards facilitating trades in new spot crypto funds. Up until now, wealth management businesses have only provided exposure to these funds if customers specifically requested it.

The latest read on banks and hedge funds' exposure to spot crypto products will be disclosed in the next filing deadline on Wednesday, according to Morgan Stanley's $1.5 trillion in assets under management. The bank held around $270 million in spot bitcoin ETFs, as disclosed in a May 13F filing.

Morgan Stanley's decision to launch a spot crypto ETF may prompt other wirehouses and asset managers to begin performing in-house due diligence on these products.

Spot ether ETFs, launched recently, have experienced less inflows compared to the successful launch of spot bitcoin ETFs in January. While the bitcoin funds have $54.30 billion in assets under management, the spot ether funds have only $7.25 billion.

Moving in lock step with U.S. stocks

The crypto market traded in lock-step with U.S. equities most of the week.

Since Monday, the total value of all tokens has surpassed $2.1 trillion, with a gain of hundreds of billions of dollars.

On Friday, Bitcoin reached an almost $63,000 intraday high, while ether was trading above $2,700 earlier.

In the past day, more than $100 million in short bets on bitcoin were liquidated, contributing to its price increase.

Despite being above their Monday lows, bitcoin and ether have declined in the past week, with ether on track for its worst week in nearly two years.

Bitcoin, Ethereum, and other crypto-aligned stocks have experienced three consecutive weekly losses.

This week's crypto price fluctuations have exposed the extent to which digital assets mirror U.S. stock movements and react to the same macroeconomic factors.

On Thursday, the S&P 500 had its best day in almost two years, and the crypto market came roaring back. The unwinding of the yen carry trade earlier in the week had contributed to global market turmoil, but fresh data on jobless claims came in lower than expected, helping to allay recession fears.

It also helps that regulatory winds appear to be shifting.

Another U.S. judge has ruled in favor of the crypto industry in its legal battle against the Securities and Exchange Commission.

On Thursday, Ripple's XRP token surged 22% after District Judge Analisa Torres ordered the company to pay $125 million in civil penalties, which was significantly less than the $2 billion the SEC was seeking.