Spot bitcoin ETFs log $477 million in positive flows amid softening gold demand

Spot bitcoin exchange-traded funds in the U.S. returned to positive territory on Tuesday, reporting a total daily net inflow of $477.2 million. 

"Yesterday's return to net positive flows signals a potential stabilization in institutional sentiment after recent volatility, suggesting renewed confidence in crypto as a portfolio diversifier amid economic uncertainties," said Nick Ruck, director at LVRG Research.

According to data from SoSoValue, nine out of 12 bitcoin funds saw net inflows yesterday, led by $210.9 million into BlackRock's IBIT. Ark 21Shares' ARKB reported $162.8 million in inflows, and Fidelity's FBTC recorded $34.15 million. 

Spot Ethereum ETFs also saw net inflows yesterday, drawing in $141.6 million. Fidelity's FETH led the pack of inflows with $59 million, while funds from BlackRock, Grayscale and VanEck added inflows.

In the past few days, spot crypto ETFs saw over $1 billion in net outflows as the crypto market tumbled on persistent trade tensions between the U.S. and China.

Meanwhile, Bitcoin ETFs saw $7.41 billion worth of total trade volume on Tuesday, keeping in line with the elevated volumes the funds have seen this month. Volumes have ranged between $5 billion and $9.78 billion in October, compared with $2 billion to $4 billion last month.

Positive outlook

LVRG's Ruck views the volume growth as a positive factor for the ETFs and crypto in general.

"The surge in monthly trading volumes over the past month marks an uptick in institutional engagement, which delivers deeper liquidity and risk appetite as traditional investors increasingly allocate to digital assets for yield and hedging opportunities," Ruck said.

Ruck also said that the demand for gold has peaked, which will lead investors to seek alternative risk-adjusted opportunities in crypto. Spot gold prices saw a significant decline of 5.9% on Tuesday, recording the steepest intraday drop since 2020. As a result, some analysts predict an "aggressive catch-up trade" for bitcoin.

The Block's crypto price page shows that the crypto market remained relatively steady in the past day. Bitcoin edged up 0.18% in the past 24 hours to trade at $108,450, while ether is down 0.19% at $3,869.