US spot Bitcoin exchange-traded funds are showing signs of recovery after weeks of sustained outflows, as Bitcoin moved back above the $68,000 mark. Fresh capital flowing into these funds has raised hopes of a turnaround following a prolonged period of investor withdrawals.
ETFs Record Strongest Daily Inflows Since Early February
On Wednesday, US-listed spot Bitcoin ETFs recorded $506.5 million in net inflows, the largest single-day total since February 2. The renewed buying came as Bitcoin traded around $68,212, reinforcing bullish sentiment across the broader crypto market.
According to data from SoSoValue, weekly inflows have now reached $560.4 million. If the trend holds, this would mark the first week of net inflows after five consecutive weeks of withdrawals that saw $3.8 billion exit these funds. February had been particularly difficult, with an estimated $20 billion wiped out from net ETF assets during the market downturn.
The latest numbers suggest investors may be stepping back in as price stability returns.
BlackRock’s IBIT Leads the Charge
Among issuers, BlackRock once again dominated inflows. Its iShares Bitcoin Trust ETF attracted $297.4 million on Wednesday, accounting for more than half of the day’s total.
Other major funds also saw renewed interest. The Bitwise Bitcoin ETF brought in $39.4 million, while the Fidelity Wise Origin Bitcoin Fund added $30.1 million.
Trading activity mirrored the improvement in flows. Combined ETF volumes climbed above $4.3 billion, the highest level recorded since February 9. The pickup in both flows and trading suggests that institutional participation is returning after a cautious start to the year.
Market Structure Debate Resurfaces
Even as capital returns to Bitcoin ETFs, questions around market structure and price discovery have resurfaced.
Much of the recent discussion centers on the role of authorized participants and large market-making firms such as Jane Street. These firms play a critical role in creating and redeeming ETF shares, helping maintain alignment between ETF prices and underlying assets.
Source: hodlonaut
Speculation intensified following a lawsuit filed by Terraform Labs administrator Todd Snyder, with rumors circulating online alleging that derivatives exposure and trading strategies may be influencing Bitcoin’s price behavior.
Jeff Park, adviser at Bitwise Asset Management, addressed the debate in a post on X. He stated that no authorized participant is explicitly suppressing Bitcoin’s price. However, he noted that the mechanics of the ETF structure could affect the broader price discovery process in more subtle ways.
According to Park, concerns may not lie in direct manipulation but in how the framework shapes liquidity and trading dynamics. He suggested that understanding these structural details reveals a more complicated picture than simple conspiracy claims.
Lingering Concerns Over “Paper Bitcoin”
The renewed inflows come against a backdrop of continuing debate over so-called paper Bitcoin. Critics argue that some institutions gain price exposure through derivatives or ETF shares without holding actual Bitcoin, potentially distorting supply and demand signals.
The issue gained attention earlier this month when The Kendall Report highlighted ETFs as a possible contributor to synthetic exposure in the market.
Concerns about transparency were further fueled by a recent incident at Bithumb, one of South Korea’s largest crypto exchanges. The platform mistakenly distributed 620,000 BTC that it did not hold, drawing attention to operational controls and reserve verification practices.
While the exchange error was separate from US ETF activity, it amplified broader questions around asset backing and trust in crypto infrastructure.
Cautious Optimism Returns
Despite lingering doubts, the return of capital into US Bitcoin ETFs signals a shift in sentiment. Selling pressure has weighed on the market since October 2025, and many analysts had questioned whether institutional appetite would remain steady.
For now, two consecutive days of substantial inflows suggest that investors are willing to re-engage as Bitcoin stabilizes above $68,000. Whether this momentum continues will likely depend on broader market conditions, regulatory developments, and clarity around how ETF mechanics interact with spot markets.
If weekly inflows remain positive, it could mark a turning point after a challenging stretch for digital asset funds.
