Bitcoin ETFs See $355M Inflow After 7-Day Outflow Streak as Liquidity Conditions Improve

U.S. spot Bitcoin exchange-traded funds (ETFs) ended a seven-day outflow streak, posting $355 million in net inflows on December 30. This marked a reversal after $1.12 billion in cumulative outflows over the prior week according to reports. BlackRock's iShares Bitcoin Trust ETF (IBIT) led the inflows with $143.75 million, followed by the Ark 21Shares Bitcoin ETF (ARKB) with $109.56 million and Fidelity's Wise Origin Bitcoin Fund (FBTC) with $78.59 million.

The shift in flows came amid improving global liquidity conditions. Arthur Hayes, a prominent crypto analyst, noted that global dollar liquidity likely bottomed in November and has been edging higher since. Other analysts also pointed to rising money supply measures across major economies as a positive sign.

Bitcoin ETFs have faced a challenging December, with $744 million in net outflows overall as investors pulled back amid falling prices and thin year-end liquidity. The largest single-day outflow occurred on December 26, when funds shed about $275.9 million.

Why Did This Happen?

Improving liquidity conditions are a key factor behind the recent inflows into Bitcoin ETFs. Arthur Hayes suggested that the market is now on the bullish side of the liquidity cycle. This view is shared by other analysts, who noted that the Federal Reserve is set to inject $8.165 billion into markets on January 2, further supporting liquidity.

Bitcoin ETFs have also seen a mixed performance in December. While they ended a seven-day outflow streak on December 30, they recorded a net outflow of $744.49 million for the month up to that point. The weekly inflow of $335.73 million was a positive sign, but the month remains marked by outflows.

How Did Markets Respond?

The inflows into Bitcoin ETFs came as the price of Bitcoin remained pinned below $90,000. At press time, BTC USD was trading at $88,724, reflecting a 1% intraday rise and a roughly 2% weekly rise.

Bitcoin ETFs are often seen as a proxy for institutional demand in the crypto market. The recent inflows suggest a shift in sentiment, though market observers caution that the flows remain mixed. Vincent Liu, chief investment officer at Kronos Research, noted that the recent outflows were likely temporary, linked to holiday positioning and thin liquidity.

The price of Bitcoin is also influenced by broader macroeconomic factors. The asset has shown increasing correlation with traditional risk assets like equities, especially as institutional investors have moved into the market. This correlation is expected to strengthen as monetary policy shifts and AI-related valuations become more prominent in 2026.

What Are Analysts Watching Next?

Analysts are closely watching early January flows to determine whether the recent inflow into Bitcoin ETFs marks a sustained shift in investor sentiment or a temporary pause in selling activity.

Vincent Liu expects conditions to improve as institutions return after the holiday break and capital flows normalize. He also noted that the Fed is expected to cut rates in 2026, which could support further inflows into Bitcoin ETFs.

Bitcoin ETFs have shown resilience despite the outflows. Even with a net outflow for the month of $744.49 million, the cumulative ETF stack remains large and sticky, acting as a structural buyer of supply. Analysts are also watching for potential regulatory changes and broader macroeconomic trends that could influence the ETF landscape.