Bitcoin ETF Sees $1.97 Billion Inflow…Are Institutional Funds Moving Again?

▲ BlackRock Bitcoin/ChatGPT generated image ©

Bitcoin spot ETFs showed the strongest recovery signal this year with a net inflow of $1.97 billion in April, but with funds concentrated in BlackRock and Fidelity, the market remains in a 'fragile rebound' phase.

According to investment media outlet TradingNews on May 1 (local time), iShares Bitcoin Trust (IBIT) traded up 2.65% to $44.47, with a market capitalization of $40.51 billion. Bitcoin (BTC) rose 3.00% around $78,505, testing the $79,000 resistance level. The total net inflow into US Bitcoin spot ETFs in April was $1.97 billion, marking the highest monthly total this year.

At the center of the fund flows were BlackRock and Fidelity. According to the media, during one recovery week, IBIT saw an inflow of $537.5 million, and Fidelity Wise Origin Bitcoin Fund (FBTC) saw an inflow of $136.5 million, with these two products absorbing approximately 91% of the total net inflow. In contrast, Grayscale's GBTC continued to experience outflows due to high fee burdens, and some products from Bitwise, Ark Invest, Invesco, and VanEck also saw outflows.

However, it is difficult to consider the recovery stable. At the end of April, Bitcoin spot ETFs experienced net outflows for three consecutive trading days, and although the trend reversed with a net inflow of $23.5 million, the net inflow on the following trading day was only $14.76 million. TradingNews assessed that while institutional demand has clearly revived, the buying breadth is narrow and concentrated in a few large asset managers, suggesting it's closer to a cautious re-entry rather than an explosive recovery.

The difference in institutional preference between Bitcoin and Ethereum (ETH) was also clear. During the same period, Ethereum spot ETFs recorded a net outflow of $102.9 million over four weeks, with an additional $23.64 million exiting in a single recent day. The media interpreted this as a signal that institutions view Bitcoin as a reserve digital asset, while Ethereum is treated as a high-beta asset that is reduced first when risk appetite weakens. XRP spot ETFs and Solana spot ETFs are each securing niche institutional demand, but their fund sizes significantly trail Bitcoin.

The macroeconomic environment is another variable for Bitcoin ETF flows in May. The possibility of Kevin Warsh becoming the US Federal Reserve Chair could stimulate expectations for interest rate cuts, and news that Iran delivered a peace proposal to the US via Pakistan led to a drop in international oil prices and a recovery in risk appetite. However, Middle East risks, hacking incidents, and regulatory vigilance remain burdens that could still sway ETF fund flows.

Technically, whether IBIT breaks above $45 has been presented as a short-term turning point. The $40-$43 range was mentioned as an area of buying interest, with $52, $60, and long-term $72 as key price targets. Bitcoin has the potential for buying interest to emerge in the $74,000-$76,000 correction zone, with $84,000, $95,000, and an artificial intelligence model's upper target of $118,000 suggested as mid-to-long-term upside targets. Ultimately, the key for the ETF market in May hinges on whether the $1.97 billion inflow is a one-time rebound or a signal of a full-scale re-entry of institutional funds.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*