Bitcoin (BTC) ETFs See $319 Million in Inflows as Institutional Investors Buy the Dip

On Wednesday, inflows into US-listed Bitcoin ETFs exceeded $315 million, marking a sharp reversal from the $96 million in outflows recorded the previous day.

On Wednesday, inflows into US-listed Bitcoin (BTC) exchange-traded funds (ETFs) exceeded $315 million, according to SosoValue. This marks a sharp reversal from the $96 million in outflows recorded the previous day.

The surge in demand for BTC ETFs comes despite a modest decline in the cryptocurrency’s price, which fell slightly to $102,413 by 14:01 ET (18:01 GMT).

None of the twelve spot BTC-backed ETFs reported outflows, and inflows into these funds totaled $319.56 million.

The shift in sentiment is evident as retail and institutional investors continue to pour money into BTC, presenting an opportunity to buy the dip and capitalize on the coin’s long-term potential.

Among the twelve ETFs, iShares Bitcoin Trust (NYSE:IBTC) saw the highest net inflow, with $232.89 million flowing into the fund. This brings the ETF's total historical net inflow to $45.01 billion.

Following closely with the second-highest daily net inflow was Fidelity’s Bitcoin Trust (BTC) ETF (NASDAQ:FBTC), which received $36.13 million, increasing its total historical net inflows to $11.65 billion.

BTC Funding Rate Remains Positive, Signaling More Bulls

BTC's price pulled back slightly by 1% over the past 24 hours, but derivatives data indicates that bulls are not backing down despite the slight dip in spot prices.

The coin's funding rate remains positive, indicating that traders are still willing to pay a premium to maintain long positions in perpetual futures. At press time, this rate stands at 0.0025%.

The funding rate, a periodic payment exchanged between traders in perpetual futures contracts to keep prices aligned with the spot market, is an essential indicator of market sentiment.

When its value is positive, it signifies a higher demand for longs, with traders holding long BTC positions paying those holding short positions. This dynamic can exert upward pressure on the coin's value.

Moreover, options activity showcases greater demand for calls than puts, suggesting traders are positioning for potential upside in the near term.

In summary, the massive inflows into BTC ETFs suggest that large institutions may be accumulating BTC at lower price levels, anticipating a potential shift in the market.

As the world's first Bitcoin ETF, ProShares Bitcoin Strategy ETF (NYSE:BITO) was launched in October 2021, paving the way for other institutions to enter the BTC market.

This move brought forth a wave of Bitcoin ETFs, diversifying investment options for those seeking exposure to the cryptocurrency.