Bitcoin ETF Inflows Hold Strong—And May Be Just Getting Started

Despite choppy markets and a 13% slide in bitcoin prices during the first quarter, spot bitcoin ETFs still attracted over $1 billion in net inflows—a surprising show of resilience that could signal stronger growth ahead.

Juan Leon, senior investment strategist at Bitwise, said institutional demand is quietly gaining momentum. “Even if market conditions don’t improve, we’re seeing continued interest from financial advisors and professional investors,” he said. “The shift in sentiment—especially after the Trump administration’s endorsement of bitcoin—has created a clear window for broader adoption.”

Retail enthusiasm remains muted, largely focused on price action. But institutions appear to be playing the long game. Leon believes Q2 inflows could easily surpass $3 billion as more wealth platforms integrate crypto products and policymakers clarify digital asset regulations.

Still, some of that Q1 activity may be less bullish than it looks. A sizable portion of ETF inflows likely came from basis trades, where investors capture arbitrage profits by buying spot ETFs and shorting bitcoin futures. While this strategy offered generous returns late last year, yields have narrowed sharply in recent weeks—potentially slowing that inflow stream.

Nate Geraci, president of the ETF Store, remains optimistic. “We’re still early in the adoption curve. As institutional investors get more comfortable with bitcoin as an asset class, you’ll see much more consistent ETF participation,” he said.

BlackRock CEO Larry Fink recently echoed that view, noting that institutional exposure is still in its infancy and could easily overtake retail-led inflows in the near future.

A recent Las Vegas ETF conference reflected growing comfort with crypto, with 57% of advisors saying they expect to boost crypto ETF allocations in 2025. That’s a significant shift from past years, where reputational risk kept many firms on the sidelines.

David Siemer, CEO of Wave Digital Assets, said fears of a recession or Fed rate cuts could further elevate bitcoin’s appeal as a hedge asset. “In uncertain times, digital gold narratives return. And that could be a key catalyst for continued ETF demand,” he said.