Institutional Buyers Power $1.1B Bitcoin ETF Surge

Bitcoin ETFs recorded $741.5 million in inflows on Sept. 10, marking the largest single-day inflow since July 16, according to data from Farside Investors. This substantial inflow was part of a broader three-day surge, with total inflows from Sept. 8 to Sept. 10 exceeding $1.1 billion. The cumulative net flows for spot Bitcoin ETFs now stand at over $55 billion since their launch in January 2024.

The inflows occurred as Bitcoin traded within a $110,000-$116,000 range, indicating that institutional investors viewed the consolidation period as an opportunity for accumulation. According to Bitfinex Alpha, this period reflected “constructive dip-buying, with logical support zones being actively defended.” The timing also aligned with historical seasonal patterns that have historically favored Bitcoin’s strength in the fourth quarter.

Ethereum ETFs also saw a reversal in sentiment, breaking a six-day outflow streak with approximately $200 million in combined inflows over Sept. 9-10. While Ethereum has underperformed Bitcoin in recent months, the inflows signaled renewed institutional interest. Bitfinex noted that Ethereum's flows were influenced by a balance between speculative demand and structured arbitrage strategies, unlike the more directional conviction seen in Bitcoin ETF flows.

The renewed institutional demand for Bitcoin ETFs has been supported by improving macroeconomic conditions and expectations for Federal Reserve rate cuts. Following weak employment data, traders priced in three rate cuts for 2025 instead of two. Historically, October and November have been Bitcoin’s strongest months, averaging returns of 21.9% and 46% respectively. With combined returns in the fourth quarter averaging 85%, the current inflow patterns suggest the potential for sustained momentum if favorable conditions continue.

ETF velocity measurements further support this trend, with sustained daily inflows of $150-200 million signaling bullish institutional regimes. The recent three-day inflow of over $1.1 billion far exceeded this threshold, reinforcing the notion that institutional buyers are increasingly allocating capital to Bitcoin ETFs.

The inflow patterns also highlight the growing institutional preference for spot Bitcoin ETFs over more complex strategies involving derivatives. Unlike Ethereum, which has a greater dependency on ETF flows, Bitcoin’s stronger inflows suggest a direct preference for spot exposure. This trend has been amplified by ongoing macroeconomic uncertainties, including Federal Reserve policy deliberations and geopolitical tensions affecting monetary policy independence.

The performance of the two largest spot Bitcoin ETFs, iShares Bitcoin Trust and Grayscale Bitcoin Trust, provides insight into institutional adoption. iShares, with an 0.25% expense ratio, has seen 82% asset inflows over the past year, while Grayscale, with a 1.5% expense ratio, has experienced a 17% decline in assets under management. This shift reflects the growing importance of cost efficiency in institutional investment decisions, particularly for long-term investors.

As Bitcoin ETFs continue to attract record inflows, the broader implications for the cryptocurrency market are becoming clearer. The increasing institutional participation, combined with favorable seasonal and macroeconomic conditions, suggests that Bitcoin ETFs are well-positioned to drive further adoption and market growth in the coming months.