Bitcoin News Today: Institutional Capital Rewires Bitcoin’s Flow Through ETFs

US spot Bitcoin ETFs are increasingly becoming a major source of Bitcoin trading volume, with daily figures now regularly reaching $5 billion to $10 billion, rivaling or even surpassing the volumes of some of the largest crypto exchanges. This marks a significant shift in the landscape of crypto investing, as institutional demand for Bitcoin continues to grow. According to Julio Moreno, head of research at blockchain analytics firm CryptoQuant, the rise in ETF trading volume reflects the growing institutional adoption of Bitcoin as a tradable asset. Binance, the world’s largest cryptocurrency exchange, still maintains a lead in total spot trading volume, with daily Bitcoin volumes reaching up to $18 billion. However, US spot Bitcoin ETFs are now generating trading volumes that account for roughly 67% of the Bitcoin spot volume on Binance, which itself is estimated at around $4.1 billion per day [1].

The dominance of spot Bitcoin ETFs in institutional trading is further reinforced by their increasing role in price discovery and liquidity provision. Nick Ruck, director at LVRG Research, emphasized that these ETFs have emerged as a pivotal force in the crypto markets, shaping market dynamics through their daily trading activity. ETFs now represent a substantial percentage of Bitcoin’s total supply, making them a fundamental gateway for traditional capital into the digital asset space [1]. In contrast, Ethereum’s spot ETFs appear to lag behind, with ETH spot trading still largely concentrated on Binance and Crypto.com, and ETFs accounting for just 4% of total trading volume. This suggests a slower pace of institutional adoption for Ethereum compared to Bitcoin [1].

Recent trends in investor flows highlight a shift in capital allocation, with Ethereum ETFs capturing significantly higher inflows compared to their Bitcoin counterparts. Over a five-day period, Ether ETFs saw $1.24 billion in inflows, more than double the $571.6 million recorded for Bitcoin ETFs during the same timeframe. BlackRock’s iShares Ethereum Trust (ETHA) led the inflow surge with $262.6 million in net inflows on a single day. This shift in momentum has continued over the past few weeks, with Ethereum ETFs absorbing $13.6 billion in total since their launch, with nearly one-third of that coming in just the last few weeks [3].

BlackRock’s growing influence in the ETF market extends beyond Ethereum. The firm’s iShares Bitcoin Trust (IBIT) remains the largest Bitcoin ETF by assets under management, with inflows of $63.38 million recorded in the latest rebound from a six-day outflow streak. Following a significant correction in Bitcoin prices, ETFs ended the outflow trend as investor sentiment shifted back to positive after the Federal Reserve’s dovish comments on monetary policy. Fidelity’s Wise Origin Bitcoin Fund (FBTC) also played a key role in the rebound, pulling in $65.56 million in net inflows [5].

Looking ahead, the rapid accumulation of Bitcoin and Ethereum by ETFs is expected to continue reshaping custody patterns in the crypto market. BlackRock’s iShares Ethereum ETF has now amassed 3.6 million ETH, positioning it as a close contender to overtake Coinbase as the second-largest Ether custodian. This trend signals a broader realignment in crypto custody, with traditional financial institutions like BlackRock gaining ground over long-standing crypto exchanges [4]. As spot Bitcoin ETFs continue to grow in trading volume and influence, they are cementing their role as a key driver of institutional demand and market liquidity for digital assets.

Source:

[1] United States ETFs now a major source of Bitcoin spot trading volume (https://cointelegraph.com/news/bitcoin-etfs-take-share-spot-trading-volume)

[2] Spot Bitcoin ETFs: A Comprehensive Guide (https://onekey.so/blog/ecosystem/spot-bitcoin-etfs-a-comprehensive-guide/)

[3] Ethereum ETFs Shock Wall Street With $307M Inflows In One ... (https://finance.yahoo.com/news/ethereum-etfs-shock-wall-street-200853321.html)

[4] BlackRock Bitcoin ETF Holdings Overtake Coinbase & ... (https://medium.com/@Tradingpass/blackrock-bitcoin-etf-holdings-overtake-coinbase-binance-ethereum-may-be-next-be2d9348847a)

[5] Spot Bitcoin ETFs end six-day outflow streak with $219M ... (https://cointelegraph.com/news/spot-bitcoin-etfs-break-outflow-streak-219m-fidelity-blackrock)