U.S. spot bitcoin exchange-traded funds returned to positive territory in March, drawing $1.32 billion in net inflows after enduring four straight months of outflows. The reversal marks a notable shift in investor sentiment toward the asset class. It represents one of the more closely watched recoveries in the ETF market in recent months.
At their lowest point during the downturn, ETF holdings declined by just 7.2%, a relatively contained drop given the extended period of negative flows. Since reaching that trough, holdings have partially recovered, suggesting renewed appetite among investors. The modest scale of the decline may have helped limit broader damage to the funds.
Despite the rebound in inflows, the average investor cost basis across these funds remains well above current bitcoin prices. This means many holders are still sitting on unrealized losses, which could weigh on sentiment if prices do not recover further. The gap between cost basis and market price is a key metric analysts use to gauge potential selling pressure.
The four-month outflow streak had raised questions about the durability of demand for spot bitcoin ETFs, which were launched in the U.S. market following regulatory approval. The return to inflows in March offers some reassurance that institutional and retail interest has not evaporated. Whether the trend continues will likely depend on broader market conditions and bitcoin’s price trajectory.
Originally reported by CoinDesk.
