The bitcoin price crash has stoked fears of another “crypto winter” and shaken faith in a trade that could rival gold as a store of value. While spot bitcoin ETFs have declined in recent months, net inflows over the past year remain positive, suggesting long-term investors haven’t abandoned the asset. Over the past three months, the iShares Bitcoin Trust (IBIT) posted about $2.8 billion in net outflows, while the BlackRock ETF drew about $21 billion in inflows over the past year, according to VettaFi. Across all spot bitcoin ETFs, three-month outflows totaled roughly $5.8 billion, but yearly inflows remained positive at about $14.2 billion.
Analysts say the pullback is driven more by crypto traders who built positions over years than by a broad exodus from the asset class; it’s not ETF investors driving the sell-off, notes Matt Hougan, CIO of Bitwise Asset Management. He says momentum traders and hedge funds may pull capital quickly when sentiment turns, while longer-horizon investors who hold crypto as a small allocation may ride out volatility. At CNBC’s Digital Finance Forum, Mike Novogratz suggested the market’s “era of speculation” may be ending and that future returns could resemble real-world assets, with retailers drawn to outsized gains rather than steady, single-digit returns.
Financial advisers and banks are increasingly adding bitcoin to portfolios and launching branded crypto ETFs, supporting demand even as volatility persists. If investors were capitulating, the three-month outflows would have matched the prior year’s inflows, but the data point to a nuanced market, with long-term investors not abandoning the asset. Since the all-time high last October, bitcoin has lost almost half its value and is down more than 25% in the past month, yet analysts say the latest flows do not indicate wholesale abandonment by long-term holders.
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