Spot bitcoin ETFs return to positive flows, BTC recovers above $92,000

Spot bitcoin exchange-traded funds in the U.S. returned to net inflows on Wednesday, ending a five-day streak of outflows.

According to data from SoSoValue, the bitcoin funds reported net inflows of $75.47 million yesterday, with $60.61 million going into BlackRock's IBIT and $53.84 million flowing into Grayscale's Mini Bitcoin Trust. IBIT's inflows followed its record-setting net outflows of $523 million on Tuesday, which was its largest daily outflow since launch. 

Yesterday's net inflows were partially offset by two funds that reported net outflows. Fidelity's FBTC recorded $21.35 million in outflows, while VanEck's HODL saw $17.63 million exit the fund.

The five-day net outflow streak from Nov. 12 to 18 pulled more than $2.26 billion from bitcoin ETFs. This negative flows corresponded with a broader downturn in the crypto market, with bitcoin recently dropping below $90,000 after hitting an all-time high of over $126,000 just weeks earlier.

Kronos Research CIO Vincent Liu told The Block earlier on Wednesday that ETF outflows were a sign of institutional recalibration rather than capitulation, and predicted that risk-on appetite would quickly return when macroeconomic signals become clearer.

The Federal Reserve's December interest rate decision continues to add macro uncertainty, as Chair Jerome Powell's recent comments dampened traders' hopes for another rate cut next month.

The CME Group's FedWatch Tool currently gives a 33.8% chance that the Fed would cut rates by 25 basis points next month, down from 48.9% earlier this week. Traders remain wary, as seen in the Crypto Fear and Greed Index pointing to 11 — signaling extreme fear.

Other analysts have also previously explained that the crypto prices were suffering from reduced liquidity in the market as a result of the 43-day U.S. government shutdown, which blocked authorities from spending on non-crucial operations. Market experts said liquidity is expected to return slowly as the government resumes normal operations.

Bitcoin has shown a slight recovery, up 0.72% in the past 24 hours to $92,200, according to The Block's bitcoin price page.

Meanwhile, spot Ethereum ETFs extended their net outflow streak to a seventh day, with $37.35 million leaving the funds. 

Newly launched altcoin ETFs performed better, with spot Solana ETFs taking in $55.6 million in net inflows yesterday. With two new funds debuting Wednesday, there are now six spot Solana ETFs in the U.S.

Canary Capital's spot XRP ETF posted $15.8 million in net inflows, while its Hedera (HBAR) fund saw $577,180 worth of inflows on Wednesday. Canary's Litecoin ETF saw zero flows for the day.