Have Institutions Returned?…Bitcoin Spot ETF Rebound Falters in One Day

▲ Bitcoin (BTC) Exchange Traded Fund (ETF) ©CoinReaders

Although the Bitcoin spot ETF market showed signs of a rebound, it turned back to net outflow in just one day, drawing market attention to whether the return of institutional investors will be a temporary rebound or the starting point of a new bull market.

According to TradingNews, an investment media outlet, on July 9 (local time), BlackRock's iShares Bitcoin Trust (IBIT) fell to $35.23, while the US Bitcoin spot ETF market recorded a total net inflow of $510 million over three trading days on July 2, 6, and 7, breaking a previous streak of 10 consecutive trading days of net outflows totaling $2.73 billion. However, on July 8, the overall market saw a net outflow of $84.9 million, and IBIT also experienced an outflow of $59.1 million, putting a halt to the rebound trend.

The media noted that the cumulative net outflow from US Bitcoin spot ETFs this year reached $5.4 billion. This is considered one of the largest institutional capital outflows in Bitcoin ETF history. IBIT, with approximately $44.91 billion in assets under management, is a representative product in the market, and its fund inflows and outflows are considered key indicators that most significantly impact Bitcoin's price. Indeed, during the three-day rebound, IBIT recorded a net inflow of $209 million in one day, raising expectations for a recovery in institutional investor sentiment, but the subsequent return to net outflow led to increased market caution.

The media analyzed that current ETF fund flows have become a key variable in determining Bitcoin's price. Due to the structure requiring actual Bitcoin to be bought or sold during the ETF creation and redemption process, ETF fund flows are estimated to explain about 45% of weekly Bitcoin price fluctuations. Accordingly, if IBIT consistently records net inflows, Bitcoin could attempt a rebound to the $68,000 to $70,000 range, but conversely, if net outflows continue, it could again be pressured down to around $60,000, the media analyzed.

However, positive factors supporting the possibility of a rebound remain. The net inflows over three trading days temporarily eased institutional selling pressure, and ETF funds reportedly absorbed a significant portion of approximately $216 million in strategic Bitcoin selling volume. On the other hand, considering the cumulative net outflow of $5.4 billion this year, recent inflows are only a fraction, and it is still too early to consider it a full trend reversal, according to the media's assessment.

Ultimately, the future direction of Bitcoin depends on whether institutional fund flows, centered around IBIT, can be sustained. The media stated that more important than a short-term rebound is stable net inflows over multiple trading days, predicting that if institutional funds continue to flow in steadily, Bitcoin's upward trend could continue, but if net outflows resume, the institutional capital outflow trend seen this year could again pressure the market.

*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.*