Bitcoin ETFs See $1.17 Billion Inflows Driven by Institutional Investors

U.S. spot Bitcoin exchange-traded funds (ETFs) experienced a significant influx of capital on Thursday, with over $1.17 billion in inflows, marking their second-highest day of inflows ever. This surge was primarily driven by institutional investors, with BlackRock's IBIT leading the way with $448.5 million, followed by Fidelity's FBTC at $324.3 million and ARK's ARKB with $268.7 million. Despite $40.2 million in outflows from Grayscale’s GBTC, the total net flows remained sharply positive.

This influx coincided with Bitcoin (BTC) reaching a new all-time high of $118,000 on Friday morning, pushing total net inflows across all U.S. Bitcoin ETFs above $50 billion since their launch in January. The surge in inflows reflects a growing institutional interest in digital assets, particularly in regulated, custody-grade products. This shift is attributed to the SEC's July 1st guidance on crypto ETF disclosure standards, which provided the regulatory clarity that risk-averse allocators demanded.

The institutional embrace of Bitcoin ETFs gained momentum following the SEC's guidance, signaling a disciplined approach to capital allocation into regulated vehicles. This momentum is expected to unlock substantial incremental institutional allocation potential, estimated to be in the range of $8-$10 billion in the second half of 2025, according to the analyst's forecast. The buying pressure is not just about chasing momentum but also about strategic allocation, with spot ETFs now managing close to $150 billion in assets. These inflows represent real demand, as spot ETFs require the actual purchase of Bitcoin, not just synthetic exposure.

Macro conditions are also supporting the bid, with softer yields and a stable Fed outlook encouraging rotation into alternatives with asymmetric upside. The supply-demand imbalance triggered massive forced selling, with short sellers getting crushed as Bitcoin surged to new highs. Over $1.14 billion in crypto short positions were liquidated in 24 hours, with Bitcoin shorts bearing the brunt at $679.8 million as the asset demolished resistance levels.

The combination of institutional ETF flows, corporate treasury adoption, and retail FOMO has created what is described as "float-adjusted scarcity" premium. Both institutional and retail investors are bullish on a short-term interest rate cut, based on the latest developments around the Fed chair. This is also being supported by more BTC strategies being announced. The administration has opened a new front against the Fed chair, with accusations of mismanagement and a pricey headquarters renovation.