Institutional investors return to Bitcoin ETFs

New inflows into spot Bitcoin ETFs suggest that investors are becoming more confident, even though the asset has fallen 16% since the beginning of the year.

After several weeks of steady outflows, investors have begun directing new capital into U.S. spot Bitcoin exchange-traded funds (ETFs).

This shift follows a difficult start to the year for such products. From mid-October, when Bitcoin’s price began to decline, until the end of February, spot Bitcoin ETFs recorded approximately $9 billion in cumulative outflows, according to Bloomberg Intelligence ETF analyst James Seyffart.

For 2026 overall, the category still shows net outflows of $1.1 billion, but the trend has recently changed. Since February 24, investors have allocated roughly $1.7 billion.

This rebound suggests that some investors believe Bitcoin may have reached at least a short-term bottom.

“It surprised me that at the beginning of the year there was almost no dip-buying when Bitcoin was falling sharply,” Seyffart said.

During that period, software stocks and crypto assets were declining, but investor behavior differed. ETFs tracking software companies attracted record inflows, as traders attempted to buy the dip, while Bitcoin ETFs continued to see steady outflows.

The outflows were not dramatic but persisted for a long period.

Now the situation appears to be changing. According to Seyffart, recent price action may have helped restore investor confidence. Over the past weekend, Bitcoin held above its recent lows despite geopolitical tensions surrounding Iran.

“I think investors probably feel more confident: it looks like we may have reached at least a short-term bottom,” Seyffart said. “The fact that the price held at higher levels amid such major news likely reassured many.”

The inflows also appear to reflect outright directional bets on Bitcoin, rather than market-neutral trading strategies.

Some institutional investors use ETFs and futures together in so-called basis trades, profiting from the price difference between the spot and futures markets.

However, this strategy currently looks less attractive.

Returns on such trades remain relatively low, and open interest in CME crypto futures and options has declined. This indicates that fewer traders are opening large derivatives positions typically associated with basis trading.

Instead, current ETF inflows appear to be direct bets on the future direction of Bitcoin’s price.

Despite Bitcoin’s 16% decline since the start of the year, nearly all spot Bitcoin ETFs still show net inflows for 2026.

For example, BlackRock’s iShares Bitcoin Trust (IBIT) has attracted about $300 million in capital since the beginning of the year.

This trend shows that investors continue allocating funds through regulated investment vehicles, even during market downturns.

Nate Geraci, president of ETF Store, noted that the inflows also reflect growing confidence among large asset managers promoting these funds.

“It’s easy to assume BlackRock is simply promoting its most profitable product,” Geraci said. “But I see it more as a stronger conviction that Bitcoin belongs in diversified portfolios.”

Geraci also pointed out that BlackRock has many ETFs with higher fees that the firm could promote instead.

Meanwhile, its spot Bitcoin ETF IBIT has declined about 4% year-to-date.

Asset managers rarely promote underperforming funds unless they strongly believe in their long-term prospects, he added.

See also: "Bitcoin upbeat at $72k, leads broader crypto rally as risk appetite improves"

#Bitcoin (BTC) #ETF

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