The illusion of Bitcoin Spot ETF growth... Is institutional demand only BlackRock's?

▲ BlackRock Bitcoin/ChatGPT generated image ©

Behind the growth myth of the US Bitcoin spot ETF market lies an extreme polarization where funds are concentrated in BlackRock, while other products have recorded a combined net outflow.

According to the investment media TradingNews on September 3 (local time), US Bitcoin (BTC) spot ETFs have recorded a cumulative net inflow of $52.8 billion and net assets of $84.3 billion since trading began on January 11, 2024. The difference between the invested principal and net assets, $31.5 billion, represents unrealized gains, with a return on capital of 59.7%. However, the proportion of net outflow trading days has continuously increased from 31% in 2024 to 40% in 2025 and 54% in 2026.

Fund flows within the market were overwhelmingly concentrated in BlackRock's iShares Bitcoin Trust (IBIT). IBIT's cumulative net inflow since its launch is $61.16 billion, which is $8.36 billion more than the total cumulative net inflow of all ETFs. This means that when all other US Bitcoin spot ETFs are combined, including the impact of continuous redemptions from Grayscale Bitcoin Trust (GBTC), they recorded a net outflow of approximately $8.4 billion. As of September 1, IBIT held 779,839.7 Bitcoins, valued at $62.6 billion, accounting for 3.88% of the total circulating supply of 20,078,000.

Fund flows during the first two days of September also showed high concentration. On September 1, a net outflow of $236.5 million occurred from all products, with IBIT accounting for $201.2 million, or 85.1%. The next day, the overall market shifted to a net inflow of $101.15 million, with $115.45 million flowing into IBIT alone. In contrast, $56.21 million flowed out of GBTC, and 7 out of 13 eligible products had no fund changes. This means one product accounted for 85% of the total net outflow and drove 114% of the net inflow the following day.

In August, the largest inflow in a year, $3.52 billion, was recorded, but the media analyzed that ETF funds are closer to a confirming indicator that follows already occurring movements rather than a leading indicator driving price increases. Bitcoin rose 28% from $62,603.65 on August 1 to over $81,000 on the 25th, and a significant portion of ETF funds came in later in the month. During this process, Bitcoin-denominated futures open interest decreased by 9% from approximately 646,000 to 588,000, and short position liquidations worth approximately $3 billion led to forced buying. This explains that a short squeeze pushed prices up first, and ETF funds supported the later rally.

Bitcoin recovered above $80,000 for the second time in a week, recording $80,311.25, up 4.28%, after dovish remarks from US Federal Reserve (Fed) Governor Waller. The probability of a September rate hike, as reflected by the CME FedWatch, decreased from approximately 70% to 48%. However, after the short liquidation momentum is exhausted, spot buying is needed for further price increases. If the US August employment report, to be released on September 4, is weaker than expected, expectations for a rate freeze and ETF inflows could strengthen. Still, if strong indicators emerge, the likelihood of rate hikes and redemption pressure could increase again. With net outflow trading days exceeding half in 2026, Bitcoin spot ETFs are no longer seen as a one-sided accumulation tool but are transforming into trading products where funds move in and out based on price movements.

*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.*