In a significant turnaround, U.S. listed spot Bitcoin ETFs recorded $1.32 billion in net inflows at the end of March, marking their first monthly inflows since October. According to SoSoValue data, this development follows four months of consistent net outflows that corresponded with a steep decline in Bitcoin’s value, which plummeted by nearly 50% from its all-time high of $126,000 reached in October.
During this period of outflows, the industry faced substantial financial strain, with November alone seeing $3.5 billion withdrawn from these ETFs. This was followed by further declines in December ($1.1 billion), January ($1.6 billion), and a more modest $206 million in February.
March’s inflow not only signifies a positive shift for the ETFs but also aligns with Bitcoin’s first positive monthly performance in six months, hinting at a potential change in market sentiment. Despite these inflows, ETF assets under management (AUM) have displayed remarkable resilience. Holdings dropped from 1.38 million BTC in October to a low of 1.28 million BTC, a decline of approximately 7%. However, these holdings have recently rebounded to around 1.31 million BTC, as reported by CheckonChain.
Despite the uptick in inflows and the recovery in AUM, many ETF investors remain “underwater,” holding positions well above the current market value. The average cost basis for these investors is estimated at nearly $84,000, juxtaposed against a current spot price of about $68,000. This ongoing disparity highlights the challenges facing investors in this volatile market, even as recent trends suggest a potential recovery and renewed interest in Bitcoin-based investment products.
