Bitcoin ETFs See Strongest Inflows in Months as Crypto Market Rebounds

Bitcoin exchange-traded funds (ETFs) recorded their best performance in months on the first two trading days of 2026, with a total of $1.1 billion in inflows. This marked a reversal from the outflows seen in November and December, when the funds lost $4.57 billion in combined net assets.

BlackRock’s iShares Bitcoin Trust (IBIT) accounted for $372 million of the inflows, according to data from Farside Investors. Fidelity’s Wise Origin Bitcoin Fund (FBTC) added $191 million, while several other funds also saw positive flows according to Farside Investors.

In a move signaling growing institutional interest in cryptocurrency, Morgan Stanley filed with the U.S. Securities and Exchange Commission to launch its own spot Bitcoin ETF. The bank also submitted a proposal for an ETF tied to Solana, expanding its footprint in the digital asset space.

Why Did This Happen?

The inflows into Bitcoin ETFs are often attributed to the "clean-slate effect" at the start of a new year, when investors reassess their portfolios. Analysts at Standard Chartered and Matrixport have noted a renewed appetite for digital assets following months of outflows.

BlackRock’s dominance in the Bitcoin ETF space was further reinforced, as it has consistently attracted the largest share of inflows since the funds launched in early 2024 according to market analysis. The fund’s low expense ratio and broad institutional backing have made it a preferred vehicle for Bitcoin exposure.

The inflows also reflect the maturation of cryptocurrency custody and regulatory frameworks, which have reduced the operational risk for large institutions. This, combined with competitive fee structures from ETF issuers, has made digital assets more accessible to a wider range of investors.

How Did Markets React?

Bitcoin’s price responded positively to the increased inflows, rising to $93,785 from its previous range below $90,000. The price increase was supported by both institutional and retail buying, with the latter purchasing $156.7 million worth of Bitcoin in recent sessions.

Investor sentiment also appeared to shift, as evidenced by the return of net inflows on major exchanges after a four-day outflow streak. This aligns with broader market expectations that Bitcoin could see further price appreciation as institutional demand grows.

What Are Analysts Watching Next?

Analysts are closely monitoring the sustainability of the inflows and whether they will continue into 2026. Some have expressed optimism, with Eric Balchunas of Bloomberg noting that the current inflow rate could lead to $150 billion in annual inflows if it persists.

Bitcoin’s performance is also being analyzed through the lens of macroeconomic conditions and regulatory developments. For instance, the U.S. Office of the Comptroller of the Currency’s recent decision to allow banks to act as intermediaries in crypto transactions has narrowed the gap between traditional finance and digital assets.

Looking ahead, Morgan Stanley’s entry into the Bitcoin ETF market could further legitimize the asset class and attract additional institutional capital. The bank’s ability to integrate the product into its wealth management business may also influence how other major financial institutions approach digital assets in 2026.