After an extended streak of eight consecutive trading days in the red, U.S. spot Bitcoin ETFs have finally posted net positive inflows.
While Friday’s $94 million in inflows is a positive shift, it barely offsets the $20 billion these funds have collectively lost over recent weeks.
Leading the inflows were Ark Invest and 21Shares’ ARKB, which attracted $194 million, followed by Fidelity’s FBTC with $176 million.
However, these gains were partially neutralized by continued outflows from BlackRock’s IBIT, which has experienced five consecutive days of capital flight. On Friday alone, IBIT saw $244.5 million in outflows, bringing its total weekly losses to $1.175 billion.
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The prolonged sell-off in Bitcoin ETFs has coincided with Bitcoin’s price slipping below $80,000, fueled by a combination of macroeconomic concerns, increasing regulatory scrutiny, and institutional profit-taking.
Standard Chartered’s Geoffrey Kendrick noted that Bitcoin is facing additional pressure from broader market trends, including the sharp downturn in Solana-based memecoins:
“While Bitcoin remains relatively strong within the digital asset sector, it has not been immune to the current risk-off sentiment in financial markets,” Kendrick explained.
Another factor weighing on Bitcoin ETFs is uncertainty around the Federal Reserve’s monetary policy. While many investors initially anticipated rate cuts in early 2025, persistent inflation concerns have delayed those expectations, making risk assets like Bitcoin less attractive in the short term.
Bitcoin ETFs Struggle Amid Market Volatility
A key driver of the recent outflows appears to be hedge funds employing arbitrage strategies rather than long-term investment. Many institutions have used Bitcoin ETFs to exploit price discrepancies between ETF shares and Bitcoin futures.
As market volatility increased and Bitcoin’s price declined, these funds unwound their positions, leading to the sustained outflows seen throughout February. Despite this, Bitcoin ETFs have still recorded a cumulative net inflow of $36 billion since their launch, suggesting institutional demand remains strong despite the recent sell-off.
While Friday’s inflow is a welcome sign, it’s too early to determine if it marks a turning point or a temporary pause in the ongoing market correction. Analysts remain divided on Bitcoin’s short-term trajectory. Standard Chartered predicts Bitcoin could dip further into the $69,000–$76,500 range in the coming days, particularly if ETF outflows continue.
