Bitcoin Spot ETF, 10 consecutive days of outflows ended... 'BlackRock IBIT variable' remains

▲ Bitcoin (BTC) Exchange Traded Fund (ETF) ©CoinReaders

U.S. Bitcoin spot ETFs have ended a large-scale capital outflow that lasted for 10 consecutive trading days and have turned to net inflows. However, analysis suggests it is too early to say that institutional investor sentiment has fully recovered, as funds are still exiting BlackRock's IBIT, the industry's largest product.

According to cryptocurrency market data aggregator CoinMarketCap on July 3 (local time), U.S. Bitcoin spot ETFs recorded a net inflow of $221.7 million on July 2, ending a 10-consecutive-day net outflow streak totaling $2.73 billion. This is the largest daily net inflow in the past two months. Bitcoin rebounded to approximately $61,700 from a low point below $58,000, influenced by weakened expectations of further interest rate hikes by the Federal Reserve (Fed) as U.S. non-farm payrolls in June increased by only 57,000.

Despite this net inflow, the industry maintains a cautious view. The biggest reason is that BlackRock's IBIT, a leading product in the industry, recorded a net outflow of $40.43 million on this day. In contrast, Fidelity's FBTC recorded a net inflow of $165.96 million, Ark Invest's ARKB recorded $91.84 million, and VanEck's HODL recorded $4.35 million, leading the overall capital inflow. The industry analyzed that for this rebound to be considered a genuine trend change, IBIT, which is regarded as a key indicator for institutional investors, must turn to net inflows.

IBIT accounted for most of the total ETF capital outflows, with 35,980 BTC, approximately $2.24 billion, flowing out over the past 10 trading days. The cumulative net outflow from U.S. Bitcoin spot ETFs this year also amounts to approximately $5.4 billion. However, the recent reduction in IBIT's daily outflow from the previous range of $100-$400 million to $40.43 million is interpreted as a sign that selling pressure is gradually easing. Furthermore, the fact that long-term holders' spot buying absorbed ETF selling volume, preventing Bitcoin from dropping further below $58,000, was also considered a positive factor.

In the market, IBIT's fund flow is considered the most critical variable going forward. If ETF capital inflows continue for several weeks and IBIT also turns to net inflows, the cumulative net outflow this year is likely to gradually decrease, confirming the return of institutional funds. Conversely, if IBIT's capital outflows continue or the ETF net inflows prove to be a temporary phenomenon, this rebound may remain a limited technical recovery.

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