Bitcoin ETFs Capture 98% of Crypto Fund Inflows

Bitcoin ETFs have emerged as a dominant force in the crypto investment landscape, capturing nearly all the money flowing into crypto investment products. According to a report by a digital asset manager, these ETFs attracted $867 million out of the $882 million in net inflows into crypto funds. This influx highlights a growing interest among institutional investors in regulated, Bitcoin-backed financial products.

James Butterfill, Head of Research at the digital asset manager, attributes this surge to a combination of global economic factors. These include a noticeable rise in the M2 money supply—a measure of liquid assets available for spending or investing—and increasing stagflation concerns in the U.S. economy. Additionally, several U.S. states have recently approved Bitcoin as a strategic reserve asset, enhancing its credibility in mainstream finance.

The M2 money supply, which includes savings accounts, money market funds, and small time deposits, has been on the rise since the second half of 2023. This suggests that more capital is circulating, some of which is flowing into digital assets via ETFs. Economists and policymakers closely monitor this figure to understand consumer spending potential.

U.S.-listed Bitcoin ETFs have already set a new milestone. Since their launch in January 2024, these funds have accumulated $62.9 billion in net inflows. This surpasses the previous record of $61.6 billion set just a few months ago. The data underscores how ETF vehicles are fast becoming the preferred gateway for institutional exposure to crypto markets.

While Bitcoin ETFs saw explosive growth, not all digital assets shared the spotlight. Ethereum, despite a recent surge in market activity, only attracted $1.5 million in fund inflows. In contrast, Sui made a surprising impact, pulling in $11.7 million and even surpassing Solana, which recorded $3.4 million in net outflows.

The U.S. Securities and Exchange Commission (SEC) appears more open to crypto ETFs than in years past, but it still faces a heavy backlog. With over 70 crypto ETF proposals pending, the pace of approvals remains slow. The last major greenlight came in July 2024, when the SEC approved Ethereum-based ETFs.

This week’s Bitcoin news reveals a strong institutional shift toward regulated crypto products, especially ETFs. As economic pressures build and traditional investment avenues become uncertain, Bitcoin’s role as a financial hedge—and its acceptance through formal investment channels—is becoming increasingly hard to ignore.