Bitcoin ETF Flows Turn Positive After 5-Day Outflow Streak

The five-day outflow streak that had rattled cryptocurrency markets finally broke on Wednesday as U.S. spot Bitcoin ETFs recorded $75.47 million in net inflows. The turnaround was spearheaded by BlackRock’s IBIT, which contributed $60.61 million in fresh capital—a remarkable recovery from the previous day’s record $523.15 million outflow. Grayscale’s BTC followed with substantial inflows of $53.84 million, according to data from SoSoValue.

This reversal comes after a period of sustained selling pressure that began in the second week of October, with the recent five-day rout highlighting deepening institutional caution. The dramatic swing in BlackRock’s IBIT flows—from record outflows to significant inflows within 24 hours—suggests that institutional sentiment may be more fluid than previously assumed. The inflows mark a potential shift in the bearish sentiment that has dominated markets amid ongoing macroeconomic uncertainty.

Analysts caution that the recent outflows represent more than just profit-taking. Wenny Cai, COO and Co-Founder of Synfutures, told Decrypt that ‘several forces are driving the move,’ including Bitcoin’s retreat from its October peak below $90,000, which has tested the conviction of newer ETF entrants who bought near the highs. The scale of recent ETF redemptions, particularly from major funds like IBIT, suggests institutional investors are systematically reassessing their exposure.

Evidence of a defensive shift is emerging in derivatives markets, where the cost of put options on IBIT has climbed to multi-month highs. ‘That pattern implies the outflows are not solely profit-taking but a shift toward defensive positioning,’ Cai explained. This hedging activity indicates some investors are preparing for additional downside, reflecting broader risk-off sentiment and questions around U.S. interest rates that are prompting rotation out of risk assets.

The changing sentiment is also visible in prediction markets. Users on Myriad now see the probability of Bitcoin hitting $115,000 and Ethereum revisiting $5,000 at just 35% and 38% respectively, down from above 60% last week. This bearish shift underscores the uncertainty gripping institutional investors as markets transition from momentum-driven buying to a more cautious phase.

Despite the recent volatility, analysts emphasize the need for perspective. Wali Makokha, chief product officer at Mansa, noted that ‘We’ve seen a huge wave of money into U.S. spot Bitcoin ETFs this year, over $60 billion in net inflows since launch, so a few days of outflows don’t mean the story is broken.’ The fundamental value proposition of these ETFs—regulated access to Bitcoin through normal brokerage accounts—remains unchanged.

However, not all funds participated in Wednesday’s rebound. VanEck’s HODL and Fidelity’s FBTC continued to see outflows of $17.63 million and $21.35 million respectively, reflecting persistent doubts about market recovery. Market conditions remain tense, with sustained downtrends keeping liquidations elevated around the $500 million mark on most trading days.

Looking ahead, Makokha characterizes the current pause as more of a ‘reset’ than the end of ETF demand. The sustainability of the rebound will depend heavily on macroeconomic conditions, particularly signals from the Federal Reserve regarding interest rates. According to Cai, if expectations shift toward lowering rates, ‘flows can turn positive again very quickly.’ However, if Bitcoin falls through key technical levels such as $90,000, outflows could accelerate. As Bitcoin trades at $91,700 with the total crypto market capitalization around $3.2 trillion, the coming days will be pivotal for determining whether this rebound represents genuine stabilization or merely a temporary respite.