US Bitcoin ETFs See $744M Inflow as Institutional Investors Return

After experiencing five consecutive weeks of outflows, US spot Bitcoin ETFs have shown signs of recovery with a net inflow of $744 million this week. On March 17, the ETFs saw a significant inflow of $274 million, marking the highest daily figure in over a month. This rebound indicates that institutional investors are returning to the Bitcoin market as macroeconomic factors have been priced in. However, Bitcoin remains below the $90,000 threshold.

US Bitcoin ETFs have faced substantial losses, totaling over $5.3 billion since the second week of February. The month of February was particularly challenging, with a record-breaking $3.5 billion in outflows. The sharp sell-off was attributed to institutional investors liquidating their holdings due to market volatility and shifting macroeconomic conditions. However, March has brought a turnaround, with inflows steadily increasing over the past week.

With macroeconomic concerns easing, institutional investors appear to be regaining confidence in the market. The week began on a strong note, with Bitcoin ETFs recording $274 million in inflows on Monday. The positive momentum persisted, resulting in six straight days of net inflows. On March 21 alone, the ETFs saw a total net inflow of $83.09 million.

BlackRock’s IBIT led the way, recording up to $150 million in positive flows on Friday. Meanwhile, all other issuers remained stagnant. The only outlier was Grayscale’s GBTC, which continued its trend of outflows, losing $21.9 million that day. This shift suggests that institutional players may be positioning themselves for a potential market recovery. Crypto influencer and Open4Profit founder Zia ul Haque pointed to this resurgence, questioning whether institutional investors are acting on inside knowledge.

“Institutes started Accumulating Again: Do they know something?! Bitcoin ETF saw a positive inflow for the last consecutive 5 days! This is the major consecutive inflow this month. From the beginning of March, giants sold BTC heavily which created a massive panic and price dump in the market. But in the last few days, they are accumulating again. This could be a good sign for the market,” ul Haque wrote. His observation aligns with the steady recovery in ETF inflows and Bitcoin’s price action, which continues to defend against further downside.

However, despite the positive ETF flows, not everyone shares the bullish outlook and optimism for Bitcoin’s price recovery. Some analysts think that Bitcoin ETF inflows do not clearly reflect resuming buyer interest. Institutional trading strategies are potentially experiencing structural shifts. Hedge funds often leverage a low-risk arbitrage strategy involving Bitcoin spot ETFs and CME futures.

“The ETF ‘demand’ was real, but some of it was purely for arbitrage. There was a genuine demand for owning BTC, just not as much as we were led to believe. Until real buyers step in, this chop & volatility will continue,” popular analyst Kyle Chasse explained. If this structural shift continues, it could influence market stability despite the recent return of ETF inflows.

As of the latest update, Bitcoin is trading at around $84,148. It is down by a modest 0.46% in the last 24 hours, failing to reflect optimism amid the recent uptick in Bitcoin ETF investments. Meanwhile, Ethereum ETFs continue to post negative flows, with net inflows in 12 consecutive trading days (over two weeks).