Bitcoin ETF Sees Five Consecutive Days of Net Inflows, Why Did Nearly 80% Go to IBIT?

CoinWorld reports:

For five consecutive trading days, a total of $853.5 million, the funds in the U.S. spot Bitcoin ETF have turned positive again. Just a week prior, these products had seen a net outflow of $61.5 million. The funds have returned, but they have not flowed evenly into each ETF.

Last Friday, this divergence was evident: BlackRock's IBIT saw a net inflow of $86.7 million, while Fidelity's FBTC had a net inflow of $41 million; Invesco's BTCO experienced a net outflow of $19.4 million, and VanEck's HODL saw a net outflow of $10.6 million. The market is replenishing Bitcoin positions while also selectively choosing where to allocate funds.

Decrypt cites data from SoSoValue, stating that IBIT had a net inflow of approximately $690 million last week, accounting for about 80% of the total weekly net inflow into all spot Bitcoin ETFs. The concentration of funds is not indicative of a broad industry rally.

This proportion also changes the interpretation of "ETF fund inflows." If the incremental increase is primarily contributed by one product, then while the total industry flow rises, it may simultaneously pressure the shares of other products. For issuers, the competitive focus is not just on attracting Bitcoin buying but also on retaining the funds that have already entered the ETF market.

Top products typically have larger scales, more active trading, and better liquidity, making them the preferred choice for institutions adjusting their positions. Some products experiencing outflows may also be related to funds migrating between different ETFs rather than investors exiting Bitcoin altogether.

When choosing ETFs, institutions also compare spreads, trading depth, fees, and internal compliance costs. Larger products tend to attract new trades more easily, and new trades will continue to strengthen liquidity. This positive cycle can explain why funds are concentrated, but existing data cannot confirm whether each outflow has indeed transferred to IBIT.

Daily data also did not show a sustained acceleration. Last Thursday saw a net inflow of $128.7 million, which dropped to $98.9 million on Friday. Five consecutive days of positive inflows indicate that buying pressure indeed exists, but the speed of inflows and product distribution are changing.

The divergence on Friday was particularly pronounced. IBIT and FBTC combined saw inflows of $127.7 million, while BTCO and HODL combined saw outflows of $30 million. The total amount for the day remained positive, yet it included both increased and decreased positions. Focusing solely on industry net values may overlook the reordering occurring between products.

Decrypt links the fund inflows to changes in interest rate expectations. CME FedWatch data shows that market bets on a rate hike in September dropped from 55% to 40% on Friday, then rose again to 46% by Monday. Another set of data provided by Cointelegraph indicates that as of Monday, the market estimated a 56% probability of a pause in rate hikes in September.

These numbers come from futures prices, reflecting traders' bets at the time, rather than the Federal Reserve's policy commitments. The short-term fluctuations in probabilities also indicate that the market has not yet formed a stable unilateral expectation.

Interest rate expectations can affect U.S. dollar liquidity and the valuation of risk assets. When the probability of a rate hike decreases, investors are generally more willing to increase exposure to high-volatility assets; when the probability rises, positions may contract again. However, ETF flows do not correspond directly to interest rates and are also influenced by Bitcoin prices, arbitrage opportunities, and quarterly rebalancing.

Employment data has intensified this volatility. Data released on Friday showed that employers cut 23,000 jobs in July, while the market had previously expected an increase of 95,000 jobs. Weaker-than-expected data may reduce the necessity for further rate hikes, but a single data point is insufficient to explain all ETF inflows.

Tim Sun, a senior researcher at HashKey, believes that after a brief pullback in the AI boom, institutional funds are re-entering Bitcoin; this influx may include both portfolio rebalancing and basis trading. The buying pressure includes both allocation demands and relative value trading, and not all funds are betting on a unilateral rise in Bitcoin.

Basis trading, in particular, needs to be distinguished from directional buying. Traders can buy ETFs while simultaneously establishing reverse positions in the futures market to profit from the price difference between spot and futures. Such funds may boost ETF inflows but do not necessarily indicate that investors are bullish on future prices. Judging sentiment solely based on net inflow figures can easily overestimate the directional nature of buying pressure.

This round of data provides two clear signals: the spot Bitcoin ETF has ended the net outflow from the previous week, and funds have returned to the market; incremental funds are clearly skewed towards top products like IBIT.

While the continuous net inflow is noteworthy, it cannot alone prove that the trend has reversed. Moving forward, in addition to observing total flows, it is essential to monitor whether funds continue to concentrate in a few products and whether daily inflows can be sustained.

Price performance also needs to be observed in sync with flows. If ETFs continue to attract capital while Bitcoin prices show limited response, it may indicate that selling pressure is still absorbing new demand; if prices and flows strengthen simultaneously, the impact of fund replenishment becomes more direct. Combining ETF data with futures positions, basis, and spot transactions will allow for a more accurate distinction between allocation and arbitrage trading.

If inflows continue and spread to more products, the foundation for market recovery will be more solid; if the total quickly declines while IBIT continues to absorb the vast majority of funds, it is more likely that product concentration is increasing. The structural data in the coming days will provide more valuable insights than a headline stating "five consecutive days of net inflows."

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