After weeks of steady withdrawals, investors are beginning to allocate new funds to U.S. spot Bitcoin exchange-traded funds (ETFs).
The shift comes after a rocky start to the year for the product. Data from Bloomberg ETF analyst James Seyffart shows that from mid-October the price of Bitcoin began to fall, and by the end of February, spot Bitcoin ETFs had accumulated outflows of approximately US$9 billion. Net outflows from the category remain at $1.1 billion in 2026, but flows have changed in recent days. Since Feb. 24, investors have added about $1.7 billion.
The rebound suggests some investors believe Bitcoin may have found at least a short-term bottom.
“What’s surprising to me is that when Bitcoin started the year like a falling knife, there was basically no buying on the dip,” Seyffart said. At the time, both software stocks and cryptoassets were sliding, but investor behavior was divergent. Software ETFs saw record inflows, while Bitcoin ETFs continued to see steady withdrawals as traders tried to find a bottom.
These withdrawals are unspectacular, but they persist.
Now that pattern appears to be reversing. Seifert said recent price movements could help restore confidence. Over the weekend, Bitcoin held above recent lows despite geopolitical tensions related to Iran.
“I think investors may feel more comfortable that we’ve at least hit a near-term bottom,” Seifert said. “Higher lows on such big news this weekend must be a comfort to some.”
The inflows also appear to reflect outright bullish positioning rather than a market-neutral trading strategy. Some institutional investors use both ETFs and futures in so-called basis trading, where they gain from the price difference between the spot and futures markets.
But this setup doesn’t look attractive right now.
Yields associated with these trades remain relatively low, while open interest in CME Group’s cryptocurrency futures and options markets has declined. The decline suggests that fewer traders are holding the large derivatives positions that often accompany arbitrage strategies.
Instead, ETF inflows look more like direct bets on where Bitcoin’s price will go.
Although Bitcoin is down about 16% this year, nearly all spot Bitcoin ETFs are still showing net positive flows in 2026, with BlackRock’s iShares Bitcoin Trust (IBIT) adding about $300 million in capital so far this year. This dynamic highlights how investors continue to allocate through regulated fund structures even during economic downturns.
Nate Geraci, president of the ETF Store, said the flows also reflect growing confidence among large asset managers in promoting these funds.
“It’s easy to view this as BlackRock simply pushing its highest-grossing products,” Geraci said. “But I think it’s more about the firm doubling down on its belief that Bitcoin belongs in a diversified portfolio.”
Geraci noted that BlackRock owns a number of ETFs with higher fees so it can focus on them. Meanwhile, its spot Bitcoin ETF IBIT is down about 4% this year. Asset managers rarely focus on laggard funds unless they have strong confidence in their long-term prospects, he said.
