Bitcoin ETFs lengthen recovery as $145M in new inflows signal cooling sell pressure
United States spot Bitcoin exchange-traded funds are showing early signs of stabilizing after a turbulent stretch of redemptions, with fresh capital beginning to trickle back into the market. After booking roughly $371 million in net inflows on Friday, spot Bitcoin ETFs added another $145 million on Monday as the underlying asset traded close to the $70,000 mark, according to data aggregators tracking ETF flows and crypto prices.
The latest wave of buying has not yet erased the prior week’s $318 million in net outflows, nor the roughly $1.9 billion in redemptions recorded since the start of the year. However, the pace of withdrawals is slowing, and that shift is increasingly seen by digital asset managers as a potential sign that the worst of the recent selling may be passing.
Analysts at a leading crypto asset manager noted that weekly outflows have dropped sharply to around $187 million despite persistent downward pressure on Bitcoin’s price. The firm’s head of research described this deceleration as historically consistent with turning points in investor sentiment, where heavy selling begins to exhaust itself and more patient capital starts to step back in.
This emerging stabilization in ETF flows comes against the backdrop of a broader correction that dragged Bitcoin back toward price levels last seen in October 2024. Unlike prior downturns in the sector, the recent slide has not been triggered by major bankruptcies, protocol failures, or systemic shocks. Research analysts at a major brokerage framed the current pullback as arguably “the weakest bear case” Bitcoin has ever encountered, precisely because it lacks the catastrophic headlines that typically accompany deep crypto drawdowns.
Instead, much of the volatility has been attributed to Bitcoin’s accelerating integration into mainstream finance. The rapid growth of spot ETFs and other regulated investment vehicles has intensified debates about how increased institutional participation might reshape the asset’s supply dynamics, narrative of digital scarcity, and long-term volatility profile. Some skeptics argue that as Bitcoin becomes more heavily financialized, its original ethos as a grassroots, anti-establishment monetary alternative risks dilution.
Still, this shift has not driven early adopters from the market in any meaningful way, according to a senior executive at crypto-focused asset manager Bitwise. The firm’s chief investment officer, speaking in a recent interview, said that even amid the ETF outflows and price swings, long-standing Bitcoin holders are largely staying put and, in many cases, simply trimming positions to realize profits rather than liquidating completely.
He acknowledged that a core contingent of “cypherpunk, libertarian OGs” remains wary of the growing dominance of large asset managers, including household-name financial institutions that now run some of the biggest Bitcoin funds. Yet he characterized that group as a shrinking slice of the overall holder base, suggesting that most early investors have made their peace with institutional capital playing a bigger role in the ecosystem.
Many of those early participants, he noted, entered Bitcoin with relatively small stakes but saw those positions balloon into life-changing sums as the asset appreciated over multiple cycles. Rather than exiting entirely, they are more likely to take partial profits—selling a portion of their holdings to lock in gains—while still keeping significant exposure for the long term. This pattern helps explain why on-chain and ETF data show selling pressure without a corresponding collapse in long-term holder balances.
The resilience of early adopters matters for market structure. Long-term holders historically act as a stabilizing force, absorbing volatility and providing a floor during corrections. Their willingness to stay invested, even while institutional products such as ETFs see ebbing and flowing demand, suggests that Bitcoin’s foundational investor base remains largely intact beneath the surface-level turbulence in regulated vehicles.
At the same time, the renewed inflows into spot Bitcoin ETFs are being closely watched as a barometer of institutional appetite. These funds are used by financial advisors, wealth managers, and corporate treasuries that prefer regulated, exchange-listed exposure over self-custody or offshore exchanges. When capital flows into these products, it often reflects growing comfort with Bitcoin among more conservative or compliance-focused investors.
The rebound isn’t limited to Bitcoin alone. Spot ETFs tracking major altcoins also saw renewed interest at the start of the week. Ether-focused products drew about $57 million in net inflows, while XRP funds attracted roughly $6.3 million. Although these numbers are modest compared with Bitcoin’s, they underscore that demand for regulated crypto exposure extends beyond the market’s flagship asset.
For portfolio managers, the slowdown in outflows and tentative return of inflows raise key strategic questions. Some see this phase as a typical mid-cycle shakeout, where leverage is flushed from the system and speculative excess cools before the next leg higher. Others caution that as ETFs grow larger, they may amplify both sides of the cycle: strong inflows during risk-on periods could fuel rapid price appreciation, while synchronized redemptions in risk-off phases could deepen pullbacks.
Another emerging theme is how ETF flows interact with macro conditions. With Bitcoin trading near historically elevated levels, interest-rate expectations, liquidity conditions, and broader equity market sentiment have become crucial drivers of risk appetite. If central banks signal a more accommodative stance or if tech and growth stocks resume strong performance, Bitcoin ETFs could see further inflows as investors rotate back into higher-risk assets.
On the other hand, any renewed surge in volatility, regulatory shocks, or macro stress could trigger another wave of redemptions, especially from newer entrants who lack the conviction of long-standing holders. That dynamic underscores why many analysts are focused not just on the direction of ETF flows, but on their persistence: a few days of inflows may spark optimism, but sustained demand over weeks or months would be a stronger confirmation of a durable trend shift.
Crucially, the institutionalization of Bitcoin via ETFs does not appear to be eroding the asset’s core value proposition for the majority of early believers. Many still view Bitcoin as a hedge against monetary debasement, a globally transferable store of value, and a politically neutral alternative to legacy systems—even if it is increasingly wrapped in traditional financial structures. From their perspective, ETFs represent an additional access layer rather than a replacement for self-custody and direct ownership.
Looking ahead, the interplay between these two worlds—grassroots holders and institutional buyers—will likely define the next phase of Bitcoin’s evolution. If long-term holders continue to retain sizable positions while ETFs steadily accumulate coins on behalf of traditional investors, circulating supply on the open market could tighten over time, potentially amplifying price responses to shifts in demand.
For now, the data paints a picture of a market in transition rather than in crisis. ETF redemptions have slowed, fresh capital is cautiously returning, early adopters are largely holding their ground, and alternative crypto ETFs are beginning to benefit from the same structural shifts that lifted Bitcoin into the institutional spotlight. Whether this nascent rebound solidifies into a sustained uptrend will depend on how these forces balance out in the months ahead.