U.S. Spot Bitcoin ETF Inflows Slow as Market Volatility and Basis Trade Unwinding Weigh on Investors
Inflows into U.S. spot bitcoin ETFs have significantly slowed in 2025 compared to the strong momentum seen in 2024.
Over the past month, U.S. spot bitcoin (BTC) ETFs have experienced net outflows of $180 million, marking one of the highest withdrawal rates since their inception in early 2024.
The ETFs have struggled to gain traction this year, largely due to bitcoin’s weak price action, which has declined by approximately 10%. While the past five days have seen a modest recovery, bringing in around $700 million in net inflows, total net inflows since their launch now stand at $36.1 billion, according to Farside data.
Two key factors have driven the recent withdrawals: increased bitcoin price volatility and the unwinding of the basis trade strategy.
Bitcoin has been particularly volatile in 2025, surging to an all-time high of $109,000 in January amid optimism surrounding President Donald Trump’s crypto-friendly regulatory stance. However, it later plunged to $76,000 in early March as concerns grew over Trump’s tariff-focused trade policies.
Retail investors typically react to sharp price swings by selling, treating bitcoin like any other high-risk asset. Meanwhile, institutional investors have been exiting the basis, or cash-and-carry, trade. This strategy involves taking a long position in a bitcoin ETF while simultaneously shorting CME bitcoin futures, creating a delta-neutral position that benefits from futures trading at a premium to spot prices.
Currently, this arbitrage opportunity offers just a 2% yield, one of the lowest levels since ETFs were approved. With U.S. Treasury yields providing more attractive returns and carrying significantly less risk, many investors are shifting toward these safer alternatives.
ETF inflows and outflows often serve as indicators of market trends. Historically, sharp outflows have coincided with local bottoms in bitcoin’s price, particularly when viewed through a 30-day moving average. This pattern was observed when bitcoin hit its recent March low, as well as during similar market corrections in April and August 2024.
