US Spot Bitcoin ETFs See Renewed Inflows as Selling Pressure Eases

• The head of research of CoinShares, James Butterfill, revealed in an update on Feb 6 that outflows reduced significantly to $187 million regardless of heavy price pressure.
• The increasing institutional presence of Bitcoin has not influenced early investors out of the market. 

The US spot Bitcoin exchange-traded funds (ETFs) prolonged a tentative rebound after captivating $371 million in net inflows on February 6, adding to indications that institutional demand may be stabilising after the weeks of sustained selling. 

Spot Bitcoin ETFs further captivated $145 million in inflows on February 9 as BTC exchanged hands around $70,000, as per the data revealed from SoSoValue. 

The inflows have yet to balance the $318 million of outflows with around $1.9 billion in redemption year-to-date of the last week, but the reduced rate of losses could indicate a potential trend reversal for crypto investment products, as per CoinShares. 

The head of research of CoinShares, James Butterfill, revealed in an update on Feb 6 that outflows reduced significantly to $187 million regardless of heavy price pressure, with the decline in flows historically indicating a potential inflection point. 

The Weakest Bear Case

The increasing institutional presence of Bitcoin has not influenced early investors out of the market, as per the senior executive at asset manager Bitwise, even as the ETF witnessed heavy outflows at the time of the recent crypto sell-off that took BTC back toward October 2024 price levels. 

Analysts at research company Bernstein outlined the latest downturn as the “weakest bear case” in the history of Bitcoin, highlighting the non-appearance of prominent industry failures normally linked with deeper crypto market stress. 

Having no transparent catalyst behind the fall, some market observers have associated the volatility with the surging institutionalisation of Bitcoin comprising ETFs and concerns that wider financialisation could dilute the scarcity narrative of the asset. 

Although the move has not relevantly deterred early adopters, the chief investment officer of Bitwise, Matt Hougan, mentioned it in comments to the Bloomberg ETF analyst Eric Balchunas. 

Hougan accepted that a cypherpunk, libertarian OG core of Bitcoin backers may not be uncomfortable having the surging influence of big asset managers like BlackRock but mentioned that group as a “shrinking minority”.

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