Bitcoin ETFs Draw Billions Despite Price Slump — Institutions May Be Just Getting Started
Bitcoin’s price may have stumbled in Q1, but interest in spot bitcoin ETFs hasn’t missed a beat. Over $1 billion poured into the funds during the quarter — and analysts say the inflow trend is only getting started.
Even with BTC falling 13% and the S&P 500 turning in its worst quarterly loss in over two years, spot bitcoin ETFs like BlackRock’s IBIT and Bitwise’s BITB managed to quietly rack up inflows. According to Bitwise strategist Juan Leon, that strength isn’t a fluke.
“We’re seeing consistent traction from advisors and institutions,” Leon said. “Even if prices stay flat or decline, the broader story of global adoption — especially following President Trump’s bitcoin-friendly stance — is resonating with professional investors.”
Retail demand, meanwhile, has cooled as price action dominates headlines. But under the surface, financial professionals are steadily building long-term positions. Leon expects as much as $3 billion in additional ETF inflows in Q2 as institutional access improves and regulation evolves.
Still, not all of the Q1 inflows signal direct bullishness. A sizable portion likely came from arbitrage strategies — particularly the “basis trade,” in which traders buy the ETF and short futures contracts to pocket the spread. That strategy was highly profitable last year, but yields have since dropped closer to 5%, suggesting arbitrage-driven inflows may taper.
Even so, long-term ETF bulls remain optimistic. “Institutions are just dipping their toes in,” said Nate Geraci, president of the ETF Store. “As they get more comfortable, we’ll see much larger allocations — and that could provide a major tailwind for inflows going forward.”
Larry Fink recently echoed that view, noting that while retail investors remain dominant today, institutional investors are quickly catching up.
Momentum is building among financial advisors, too. At a recent industry conference in Las Vegas, 57% of surveyed advisors said they plan to increase crypto ETF exposure this year — a sign that crypto’s “reputational risk” stigma may be fading.
David Siemer, CEO of Wave Digital Assets, thinks macro concerns could reinforce bitcoin’s appeal. “If the economy shows more signs of strain or we get rate cut signals, bitcoin’s role as digital gold becomes even more attractive,” he said.
As institutions shift from curiosity to conviction, ETF flows could become a defining force for the asset class in 2025 — regardless of price.
