Bitcoin ETFs See $1.1B Inflow Despite Price Drop
U.S. spot Bitcoin ETFs pulled in over $1.1 billion in net inflows over just three days, marking the largest weekly tally since mid-January. The buying pressure, led by BlackRock's IBIT, persisted even as Bitcoin's price dipped to $63,000, suggesting institutions are using macro-driven weakness to accumulate.
The recent wave of buying reversed a five-week trend of consecutive outflows that saw roughly $3.8 billion exit the funds. This turnaround was sharp, with one single-day intake on February 25th reaching approximately $507 million, the strongest in about three weeks. BlackRock's iShares Bitcoin Trust (IBIT) dominated the action, absorbing around $652 million over the three-day period, which accounted for more than half of the total net flow. In a significant market structure shift, Grayscale's GBTC, historically a source of selling pressure due to its higher fees, recorded its largest single-day inflow since its conversion to an ETF. This institutional demand coincided with the Coinbase Premium Index turning positive after 40 consecutive days in negative territory. A positive premium, which shows Bitcoin trading higher on the institutional-favored Coinbase exchange versus global markets, is widely interpreted as renewed and aggressive U.S. buying pressure. Further evidence suggests this is outright bullish positioning rather than hedged arbitrage. Open interest on CME Bitcoin futures has been declining, falling to 107,780 BTC. A drop in futures interest alongside strong spot ETF buying implies that institutions are seeking direct, long exposure to Bitcoin instead of executing basis trades. Despite the strong inflows, Bitcoin's price has been volatile, recently rebounding from below $63,000 to the high $60,000s. This divergence suggests that while retail and leveraged traders might be taking profits, large institutional players are using price weakness as an opportunity to build long-term positions, absorbing the sell-side liquidity. Analysts note that despite a roughly 50% drawdown from its peak, ETF investors have shown resilience, with total outflows of $6.5 billion since the October high paling in comparison to the $55 billion in total inflows since January 2024. This behavior has been described as "diamond hands," signaling that institutional capital is treating Bitcoin as a long-term allocation.
