After 5 consecutive weeks of outflows, the US spot Bitcoin ETF rebounded this week with a net inflow of $744 million. On Monday, March 17th, there was an inflow of $274 million, which was the highest daily figure in over a month.
This rebound suggests that institutional investors are returning to the Bitcoin market as macroeconomic factors are reflected in the price. However, BTC is still remaining below the $90,000 threshold.
Bitcoin ETF Begins Recovering $5 Billion in Losses
The US Bitcoin ETF has lost more than $5.3 billion since the second week of February. This month has been particularly harsh for the ETF, with a record $3.5 billion in outflows.
The sharp sell-off was due to institutional investors liquidating their holdings amid market volatility and changing macroeconomic conditions. However, March signals a turning point, with inflows steadily increasing over the past week.
As macroeconomic concerns ease, institutional investors appear to be regaining confidence in the market. This week started strongly, with the Bitcoin ETF recording an inflow of $274 million on Monday.
The positive momentum continued, recording net inflows for 6 consecutive days. On March 21st alone, the ETF saw a total net inflow of $83.09 million.
BlackRock's IBIT led the way, recording a positive flow of up to $150 million on Friday. Meanwhile, other issuers maintained a stagnant state. The only exception was Grayscale's GBTC, which continued its outflow trend, losing $21.9 million that day.
These changes suggest that institutional investors may be positioning themselves for a potential market recovery. Crypto influencer and Open4Profit founder Zia Ul Haque pointed out this revival, questioning whether institutional investors are acting on inside information.
"Institutions are starting to accumulate again: Do they know something?! The Bitcoin ETF has shown positive inflows for 5 consecutive days! This is a major consecutive inflow this month. From early March, major corporations have been massively selling BTC, causing significant fear and price drops in the market. But over the past few days, they are accumulating again. This could be a good signal for the market," Ul Haque wrote.
His observation aligns with the steady recovery of ETF inflows and Bitcoin price movements, which are defending against further declines.
However, despite the positive ETF flows, not everyone shares an optimistic view of Bitcoin price recovery. Some analysts believe that Bitcoin ETF inflows do not clearly reflect a resumption of buyer interest.
Institutional trading strategies may be undergoing structural changes. Hedge funds often utilize low-risk arbitrage strategies involving Bitcoin spot ETFs and CME futures.
"ETF 'demand' was real, but some was purely for arbitrage. There was genuine demand to own BTC, but not as much as we believed. This volatility will continue until actual buyers get involved," popular analyst Kyle Chasse explained.
If these structural changes continue, they could impact market stability despite the recent return of ETF inflows.
At the time of writing, Bitcoin is trading at around $84,148. It has declined by 0.46% in the past 24 hours and has not reflected the optimism despite the recent increase in Bitcoin ETF investments.
Meanwhile, the Ethereum ETF continues its negative trend, recording net inflows for 12 consecutive trading days.
