Bitcoin ETF Flows Recover, But Liquidity Momentum Remains Weak

A review of Bitcoin ETF fund flows suggests that the market’s most difficult phase may have temporarily passed. Over the past three months, more than USD 4 billion has flowed back into Bitcoin through ETF channels, pointing to a tentative recovery in both institutional and retail allocation demand. At the very least, the selling pressure triggered by the earlier deterioration in risk appetite appears to have stabilised rather than intensified.

That said, the picture remains far less encouraging when viewed from a year-to-date perspective. As of September 22, Bitcoin ETFs had recorded cumulative net outflows of approximately USD 1.64 billion, in stark contrast to net inflows of USD 18.1 billion and USD 22.9 billion over the corresponding periods in 2024 and 2025, respectively. In other words, the recent return of capital appears more consistent with short-covering and dip-buying following a market correction than the beginning of a new and powerful asset-allocation cycle.

More importantly, when Bitcoin reached a record high of around USD 123,000 in mid-August last year, cumulative ETF inflows had already climbed to approximately USD 20 billion, with strong capital inflows and price appreciation reinforcing each other. By comparison, although short-term outflow pressures have now eased, the current pace of net inflows remains relatively modest and has yet to provide sufficient liquidity to support a broad-based valuation rerating.

Therefore, the key question for Bitcoin at this stage is not simply whether the worst of the selling pressure has passed, but whether capital inflows can persist and develop into a sustained trend. If ETF flows do not deteriorate again, downside risks should become more contained. However, with incremental liquidity still limited and risk appetite yet to fully recover, Bitcoin may need more time to regain strong upside momentum.