Bitcoin ETF inflows return but barely dent $8.2bn exodus
U.S. spot Bitcoin ETFs recorded their first back-to-back weeks of inflows since May, yet the $273.1 million recovered represents a fraction of recent outflows as institutional forecasts remain sharply divided.
For the first time since early May, U.S. spot Bitcoin ETFs logged consecutive weeks of net inflows. The 13 funds pulled in $75.7 million for the week ending July 17, building on $197.4 million the prior week. However, this two-week total of $273.1 million recovers just 3.3% of the $8.2 billion drained during eight straight weeks of outflows between mid-May and early July.
The path to this modest recovery was volatile. On the Monday of that week, renewed U.S.-Iran military tensions triggered a single-day outflow of $424.7 million, the largest since June 26. Investors reversed that sell-off over the subsequent four days to close the week positive.
The broader damage from the months-long slump remains stark. Combined net assets across the funds have fallen to $77.7 billion from over $106 billion in mid-May. BlackRock’s IBIT, which briefly held over $100 billion in assets last October when Bitcoin peaked above $126,000, has sold roughly 100,000 Bitcoin in recent months to meet redemptions. The fund now holds just over 733,000 Bitcoin, with the cryptocurrency trading near $64,000—roughly half its peak value.
For investors navigating the drawdown, Bloomberg Intelligence senior ETF analyst Eric Balchunas suggests looking to the oldest available roadmap: gold. In a July 17 framework, Balchunas highlighted a "spiritual parallel" between IBIT and GLD, the first U.S. gold ETF. Because both assets are non-yielding stores of value that generate no cash flow, their valuations rely entirely on shifting risk appetite.
GLD's history illustrates the extremes of that dynamic. The gold fund briefly surpassed the S&P 500's SPY as the world's largest ETF in 2011 before enduring eight years of stagnation. “Bitcoin ETFs may be following the same script: spectacular gains, painful drawdowns and recoveries that may test investors' patience,” Balchunas wrote, noting that historical gold cycles follow a "two steps forward, one step back" pattern.
Not all institutional voices share that long-term optimism. On July 1, Citigroup cut its 12-month Bitcoin price target from $112,000 to $82,000. The bank also projected zero net ETF inflows over the next year, down from a prior $10 billion estimate, citing negative fund flows, stalled U.S. crypto legislation, and weakening institutional appetite.
