Billions of dollars are moving back into Bitcoin exchange-traded funds, but the headline numbers still do not show how much of that demand is coming from institutions, according to CoinShares.
James Butterfill, CoinShares’ head of research, told Cointelegraph that US crypto investment products attracted about $4.1 billion in September. More than 53% of that total went into BlackRock’s iShares Bitcoin Trust ETF (IBIT). In a Sept. 25 market update, CoinShares also said crypto investment products across the industry pulled in about $3.5 billion over the previous five trading days.
Asked whether institutional investors were returning to crypto, Butterfill said, 「Potentially yes, but in the ETF world it is very difficult to disaggregate institutional and retail money.」
IBIT offers one signal, but not a definitive one
Butterfill said IBIT can provide clues about institutional activity because many institutional investors use the fund for the Bitcoin basis trade. That strategy involves buying shares of a spot Bitcoin ETF while shorting Bitcoin futures, aiming to profit from the gap between spot and futures prices as the two converge.
He said, 「At the moment the basis trade has an attractive yield at 6%, and month to date IBIT has seen over 53% of the $4.1 billion inflows.」
That, in his view, suggests positive sentiment may be spread across both institutional and retail investors. At the same time, he said ETF inflows are not a clean proxy for bullish conviction, because part of the buying may be tied to arbitrage strategies rather than outright bets on higher Bitcoin prices.
September flow data still favored Bitcoin products
More recent CoinShares data shared with Cointelegraph showed that September inflows into US crypto investment products had risen to about $4.44 billion, compared with $4.53 billion globally.
Bitcoin (BTC) products led those inflows with $2.84 billion. Ether (ETH) products followed with around $946 million, while Zcash (ZEC) ranked third at $284 million.
CoinShares also points to rotation within digital assets
Butterfill said investors are also looking beyond tokens and toward businesses that make money from crypto adoption. 「The rotation within digital assets deserves more attention,」 he said.
He pointed to CoinShares data from early September showing that more than $100 million had flowed into blockchain equities over the previous month.
Over the next year, Butterfill expects investors to watch more closely which businesses are generating revenue from tokenization, payments and trading infrastructure as those markets expand.
He also referred to estimates that stablecoin assets could approach $4 trillion by the end of the decade, and said Hyperliquid was recording as much as $9 billion in daily trading volume.