Institutional Rift Fuels Doubts Over Bitcoin ETF

After seven consecutive days of inflows that brought US spot

ETFs to a cumulative net inflow of $2.9 billion, the trend reversed on Wednesday as the market saw its first net outflow of $51.3 million since early August. This reversal was primarily fueled by substantial withdrawals from Fidelity, Bitwise, and ARK, while continued to attract inflows, demonstrating increasing divergence among leading fund issuers. The sudden shift has sparked debate over whether this marks a broader decline in institutional enthusiasm or simply a standard market adjustment.

Prior to this, the streak of ETF inflows had elevated Bitcoin ETF assets under management to more than $153 billion, accounting for over 6% of Bitcoin’s total market capitalization. This highlights the growing sway of institutional investors in influencing Bitcoin’s price movements. The reversal in ETF flows occurred alongside an almost 8% increase in Bitcoin’s price over the previous week, fueling speculation that some investors may be taking profits. Meanwhile, macroeconomic conditions played a role as well. The Federal Reserve’s decision to keep interest rates steady—falling short of hopes for more aggressive cuts—contributed to a wider pullback in risk assets.

Retail investor attitudes also leaned bearish. Data from blockchain analytics firm Santiment revealed a rise in negative sentiment among smaller traders. At the same time, the Bitcoin Fear and Greed Index stayed in neutral territory, suggesting the market lacked a strong directional bias. Experts remain split on what this means going forward. Some interpret the shift as a typical rebalancing within a longer market cycle, while others caution that increased divergence between retail and institutional activity could bring further volatility.

Despite the broader outflow, BlackRock’s iShares Bitcoin Trust (IBIT)—the largest spot Bitcoin ETF—continued to post positive inflows. With an expense ratio of 0.25% and $76 billion in assets managed,

has established itself as a primary choice for institutional Bitcoin investment. In contrast, Fidelity’s Wise Origin Bitcoin Fund (FBTC) and other significant funds saw outflows, indicating a shift in investor preferences. The top three spot Bitcoin ETFs—BlackRock, Fidelity, and Grayscale—collectively hold over 85% of the market, with assets totaling about $123 billion. This level of concentration raises concerns about the long-term stability of Bitcoin ETF inflows if the largest managers continue to move in different directions.

The wider market backdrop is still evolving. Although the recent outflow shifted momentum, net inflows into Bitcoin ETFs so far this year remain robust, and institutional participation continues to grow. Analysts also note that ETFs are just one facet of overall cryptocurrency demand. Corporate treasury allocations, ongoing treasury acquisitions, and potential approvals for new

and ETFs are providing additional avenues for capital to enter the market. This diversification could help cushion the effects of temporary ETF outflows, though extended outflows may still lead to price pullbacks.

Looking forward, interactions between macroeconomic trends, Bitcoin ETF flows, and spot price fluctuations will continue to be closely watched. Should the Federal Reserve adopt a more accommodative policy stance or if investor risk appetite recovers, Bitcoin might regain upward momentum. Conversely, if outflows persist—particularly from key funds like Fidelity—Bitcoin may experience a consolidation period or deeper correction. Analysts have identified support around $115,440 as a crucial level; holding above this would open the door to testing higher price points, while falling below could result in a move toward $93,600.