Bitcoin ETF Inflows Flip Positive, But Demand Still Muted

On-chain analytics firm Glassnode has pointed out how Bitcoin spot ETF inflows are still not at the intensity seen during previous rallies this cycle.

Bitcoin Spot ETF Inflows Are Currently Under 1,000 BTC Per Day

In a new post on X, Glassnode has talked about the latest trend in the inflows of the spot exchange-traded funds (ETFs). The spot ETFs refer to investment vehicles that allow investors to gain exposure to an asset’s price movements without having to directly own it.

The US Securities and Exchange Commission (SEC) approved spot ETFs for Bitcoin back in January 2024. Whenever a trader invests into one of these products, the fund buys and holds BTC on their behalf. This means that an investor of a spot ETF never has to deal with anything involving the blockchain, like an exchange or wallet.

This convenience of these investment vehicles has made them a popular mode of exposure for cryptocurrencies among the traditional investors. Institutional entities, in particular, prefer to invest through these regulated products.

The netflow related to the spot ETFs can, therefore, be worth keeping an eye on, as the trend in it may contain information about how institutions are feeling about Bitcoin.

Below is the chart shared by Glassnode that shows how the BTC US spot ETF netflow has changed over the past year.

Looks like the value of the metric has been neutral in recent days | Source: Glassnode on X

As is visible in the graph, the Bitcoin spot ETF netflow fell into the negative territory earlier in the month, indicating that capital was flowing out of these funds. This phase of outflows coincided with the cryptocurrency’s decline toward $104,000.

The price recovery that has followed since then, however, has brought with it a renewal of inflows into the spot ETFs. Thus, it would appear that demand for the asset has made a comeback.

That said, the netflow is currently still sitting at a positive level below 1,000 BTC per day. For comparison, other major rallies in this cycle started with inflows above 2,500 BTC per day. “Demand is recovering, but not at the intensity of recent rallies,” concluded Glassnode.

The spot ETF netflow isn’t the only indicator that’s hinting at weak demand among institutions. As CryptoQuant community analyst Maartunn has pointed out in an X post, the Coinbase Premium Gap is also relatively neutral at the moment.

The trend in the BTC Coinbase Premium Gap over the last few months | Source: @JA_Maartun on X

The Coinbase Premium Gap tracks the difference between the Bitcoin price listed on Coinbase (USD pair) and that on Binance (USDT pair). Coinbase is the preferred cryptocurrency exchange of the US institutional entities, including being the custodian for the spot ETFs themselves.

A positive value on the metric can imply Coinbase users are currently applying a higher amount of buying pressure compared to Binance traders. Recent rallies involved such a trend, but the metric is sitting at just neutral values right now.

BTC Price

At the time of writing, Bitcoin is trading around $112,400, up 3.5% over the last week.

The price of the coin seems to have retraced some of its latest recovery | Source: BTCUSDT on TradingView

Featured image from Dall-E, CryptoQuant.com, chart from TradingView.com

Editorial Process for bitcoinist is centered on delivering thoroughly researched, accurate, and unbiased content. We uphold strict sourcing standards, and each page undergoes diligent review by our team of top technology experts and seasoned editors. This process ensures the integrity, relevance, and value of our content for our readers.