Recent analysis from the analytics firm Glassnode reveals a worrying trend in the cryptocurrency market: a sustained decline in inflows into Bitcoin (BTC) and Ether (ETH) exchange-traded funds (ETFs). Since early November, the 30-day simple moving average of net flows for US spot Bitcoin and Ether ETFs has dipped into negative territory. This development points toward a significant retreat by institutional investors from the crypto space.
Glassnode noted that this ongoing trend suggests a period of reduced engagement and partial withdrawal from institutional investors, further highlighting a broader liquidity contraction that has taken hold in the cryptocurrency market. Historically, the flows into crypto ETFs tend to lag behind the spot markets, which have also been in a downward trend since mid-October.
The decline in ETF inflows is seen as a critical indicator of institutional sentiment, which has been a major influence on market movements throughout the year. This shift in sentiment appears to be contributing to a bearish outlook as the overall market continues to contract.
According to Coinglass, Bitcoin ETF flows have shown a negative trajectory over the last four trading days. Despite this trend, BlackRock”s iShares Bitcoin Trust (IBIT) has managed to attract some minor inflows in the past week. The Kobeissi Letter pointed out on Tuesday that there is renewed selling pressure in the crypto ETF space, with crypto funds experiencing a staggering $952 million in outflows last week. Investors have now pulled out capital in six out of the last ten weeks.
In contrast to the broader negative trend, BlackRock”s iShares Bitcoin Trust has demonstrated resilience, boasting $62.5 billion in inflows since its inception, far surpassing all other spot Bitcoin ETFs. Notably, IBIT has outperformed gold in terms of inflows, according to Bloomberg ETF analyst Eric Balchunas, who highlighted that IBIT holds a unique position as the only ETF on Bloomberg”s “2025 Flow Leaderboard” with a negative return for the year. He pointed out that despite this underperformance, it ranked sixth, underscoring the fund”s significant draw.
Balchunas further noted that BlackRock”s flagship Bitcoin ETF has attracted more inflows than the SPDR Gold Shares (GLD), which has seen a notable increase of 64% for the year. This juxtaposition illustrates the complex dynamics at play in the current market environment, where institutional interest continues to be a pivotal factor influencing trends in the cryptocurrency landscape.
