US spot Bitcoin exchange traded funds returned to positive territory on Tuesday, drawing $257.7 million in fresh inflows as Bitcoin rebounded to around $65,000. The recovery snapped a string of daily outflows and offered a brief sense of relief to investors after weeks of sustained redemptions.
According to data from SoSoValue, the latest inflows marked the strongest single day of gains since early February. The turnaround more than erased Monday’s $203.8 million in outflows and nudged weekly flows back into positive ground following five straight weeks of net withdrawals totaling $3.8 billion.
The move comes at a time when market sentiment remains fragile, with a large portion of Bitcoin’s circulating supply currently sitting at a loss and institutions trimming exposure in the final quarter of 2025.
Fidelity and BlackRock Lead the Charge
The bulk of Tuesday’s inflows were driven by two of the largest players in the market. Fidelity Investments led the day with nearly $83 million flowing into its spot Bitcoin product, the Fidelity Wise Origin Bitcoin Fund. Close behind was BlackRock, which saw $79 million added to its iShares Bitcoin Trust ETF.
The renewed demand helped stabilize cumulative net flows, which remain above $54 billion. Although that figure is below the peak of more than $62 billion reached in October 2025, it suggests that a significant base of investors has maintained long term positions despite recent volatility.
Even so, the broader picture shows moderation. Since the beginning of 2026, total assets under management across US spot Bitcoin ETFs have dropped by 30.5 percent, sliding from roughly $117 billion to $81.3 billion. The decline reflects both falling Bitcoin prices earlier in the year and consistent redemptions before this week’s rebound.
Institutional Selling Weighs on Sentiment
While ETF inflows provided a short term boost, separate data points to continued institutional caution. Bloomberg ETF analyst James Seyffart reported that institutional investors, led by advisers and hedge funds, sold approximately 25,000 Bitcoin during the fourth quarter of 2025.
Source: James Seyffart
At current prices, that amounts to about $1.6 billion. Although sizable in dollar terms, the sale represents only a small portion of Bitcoin’s roughly $1.3 trillion market capitalization. Institutions still hold about 311,700 BTC, according to Seyffart’s estimates, underscoring that professional investors remain heavily involved in the asset class even as they rebalance positions.
The Q4 selling adds context to the recent wave of ETF outflows seen earlier this year. As institutions adjusted portfolios toward year end, pressure filtered through to exchange traded products, contributing to the five week stretch of redemptions that preceded Tuesday’s recovery.
Nearly Half of Bitcoin Supply Underwater
Market analysts estimate that close to 9 million Bitcoin, or roughly 45 percent of the circulating supply, are currently underwater. In simple terms, nearly half of all coins are worth less than the price at which they were last purchased.
This metric highlights the strain many holders are facing after the asset’s pullback from late 2025 highs. When a large share of supply sits at a loss, it can dampen enthusiasm and increase sensitivity to price swings, as investors weigh whether to cut losses or hold out for a rebound.
Despite these pressures, Bitcoin’s recent climb back to $65,000 has helped ease some of the immediate stress in the market. Traders are watching closely to see whether ETF inflows can continue and support a more sustained recovery.
From Speculation to Maturity
Industry executives argue that volatility and uneven participation are part of Bitcoin’s gradual transition into a more established asset. Matt Hougan, chief investment officer at Bitwise Asset Management, said the current phase reflects an evolution rather than a setback.
Writing on X, Hougan noted that markets do not move from pure speculation to stability overnight. Instead, they pass through multiple stages, each marked by shifts in investor composition and risk appetite.
For now, the renewed inflows into spot Bitcoin ETFs suggest that demand from certain segments of the market remains intact. Yet with institutions having trimmed holdings in late 2025 and a substantial portion of supply still at a loss, sentiment remains cautious.
Whether Tuesday’s strong inflow signals the start of a broader turnaround or simply a temporary pause in a longer consolidation phase will likely depend on price stability, macro conditions and continued participation from large asset managers.
