Bitcoin ETF Inflows Hit $561 Million, Ending $1.5 Billion Outflow Streak
By John Nada·Feb 4, 2026·4 min read
Bitcoin ETFs saw $561.8 million in inflows, ending a $1.5 billion outflow streak. Analysts warn this may not indicate genuine market conviction.
US spot Bitcoin exchange-traded funds (ETFs) recorded $561.8 million in net inflows on February 2, marking a significant turnaround after a punishing streak of nearly $1.5 billion in outflows. Investors might view this as a sign of renewed conviction, but Jamie Coutts, chief crypto analyst at Real Vision, provided a more nuanced perspective. He stated that aggregate ETF flows are not indicative of buying the dip, as net institutional demand comes mainly from a diminishing group of Treasury-style buyers, which he argues is not sustainable under ongoing market pressures.
The distinction between genuine demand and mere market structure-driven flows is critical. ETF inflows reflect net share creation in the primary market but don’t necessarily indicate that the marginal buyer is taking directional Bitcoin risk. Positive inflows can either signal risk-on conviction or disguise risk-off positioning as demand. Coutts emphasizes that the derivatives market's behavior following ETF share creation is telling.
Authorized participants, typically large institutions, execute ETF creations and redemptions to keep ETF prices aligned with net asset value through arbitrage. When ETF prices deviate from their underlying holdings, these participants can profit by creating or redeeming shares, generating flows that may not reflect actual demand for Bitcoin exposure.
Additionally, inflows might represent the spot leg of a delta-neutral basis trade. The Banque de France described hedge funds exploiting the futures-spot basis by shorting futures while hedging with long spot exposure via Bitcoin ETF shares. These trades can appear bullish in headline flow prints but are economically more aligned with a carry strategy than genuine risk-on sentiment.
Coutts identified that cash-and-carry or basis trades exemplify this phenomenon. Institutions can go long on ETF shares while shorting futures or perpetual swaps, resulting in flows that look positive, yet net delta exposure remains near zero. This creates a fragile market dynamic where if the primary demand stems from a limited set of carry players, inflows could become sporadic and vulnerable in risk-off scenarios.
Recent data from the Commodity Futures Trading Commission indicates large gross longs and shorts among non-commercial participants, suggesting that a significant portion of the so-called institutional demand may be hedged rather than directional. The Banque de France’s analysis clarifies the economics at play: when the expected carry remains attractive, carry buyers increase their trades, contributing to ETF inflows.
Should volatility spike or margins increase, or if the basis collapses, these participants may rapidly de-risk, flipping inflows negative. Coutts suggests that a true bottoming process would reveal basis compression and a reduction in futures shorts while ETF inflows remained strong. This would indicate that inflows represent net delta demand rather than just carry activity masked as demand.
The February 2 inflow of $561.8 million came on the heels of Bitcoin falling below $73,000, its lowest point since the 2024 election. This price drop coincided with macroeconomic factors, including risk-off sentiment stemming from events like the Kevin Warsh Fed chair nomination and disappointing growth figures from Microsoft’s Azure. In this context, a single day of positive flows doesn’t demonstrate buyers stepping in with conviction; rather, it signals that authorized participants created shares without indicating directional exposure.
To truly gauge whether inflows reflect genuine market conviction, one must analyze the accompanying conditions in the derivatives market. If ETF inflows remain positive while hedging activities unwind, then it likely indicates new demand. Conversely, if inflows occur alongside rising futures shorts or elevated open interest, the situation suggests plumbing rather than positioning.
Ultimately, Coutts' analysis raises critical questions about the sustainability of current inflows. Market participants should tread carefully, as the apparent recovery in inflows could mask underlying fragility. The distinction between true demand and carry trades is essential for understanding Bitcoin's market dynamics moving forward.