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U.S. spot Bitcoin exchange-traded funds recorded just $100.1 million in net inflows on Thursday, an 88% collapse from the previous day’s $843.6 million, as Senate leaders abruptly shelved a key crypto regulatory bill without explanation.
The dramatic reversal marked one of the sharpest single-day pullbacks in institutional Bitcoin demand since the products launched in January 2024, signaling how tightly digital asset flows remain tied to Washington’s legislative calendar.
Despite the overall decline in Bitcoin ETF inflow, activity across individual funds remained uneven. BlackRock’s iShares Bitcoin Trust (IBIT) continued to attract significant capital, leading the market with $315.7 million in inflows.
In contrast, Grayscale’s Bitcoin Trust (GBTC) and Fidelity’s Wise Origin Bitcoin Fund (FBTC) experienced notable outflows of $36.4 million and $188.8 million, respectively.
Smaller products such as Grayscale’s BTC fund and Valkyrie’s BRRR ETF recorded modest combined inflows of $9.7 million, though these were insufficient to offset the broader pullback.
Analysts say the divergence reflects selective positioning rather than a wholesale retreat from Bitcoin exposure.
“This kind of fragmentation is what you see when investors are reassessing risk rather than abandoning it entirely,” said one digital asset strategist. “Bitcoin ETF inflow hasn’t collapsed, but it’s clearly more cautious.”
The sharp reversal followed public criticism from several industry executives, including Coinbase Chief Executive Officer Brian Armstrong, who raised concerns about restrictive language in a Senate proposal aimed at clarifying oversight of crypto markets.
The political backdrop proved decisive. The Senate Banking Committee canceled its planned markup of the crypto market structure bill on Thursday, citing insufficient support to move forward.
Days earlier, the Senate Agriculture Committee had also postponed its own markup, pointing to unresolved disagreements around jurisdiction and compliance standards.
Lawmakers have framed the delays as procedural, but market participants interpreted the moves as a sign that comprehensive crypto legislation may face a longer road than expected.
For institutional allocators, that uncertainty has direct implications for Bitcoin ETF inflow, particularly as regulatory clarity remains a prerequisite for larger balance-sheet commitments.
“Concerns around market structure don’t just affect exchanges,” said a policy analyst focused on digital assets. “They directly influence how pension funds, asset managers, and advisers think about ETF exposure.”
The episode reinforces a broader trend seen over the past year: legislative headlines can rapidly alter short-term demand for Bitcoin-linked products, even when underlying fundamentals remain unchanged.
The slowdown in Bitcoin ETF inflow coincided with a cooling of broader market sentiment. The Crypto Fear and Greed Index dropped 12 points to 49, returning to neutral territory just one day after briefly entering “greed” for the first time in months.
Bitcoin’s price action reflected the shift. After rallying earlier in the week to a two-month high near $97,870, the asset pared gains and traded around $95,684 at press time. The pullback came as investors digested both the legislative delay and the softer ETF flow data.
Still, technical indicators suggest the broader trend remains intact. On the daily chart, Bitcoin confirmed a breakout from an ascending triangle pattern, a bullish continuation structure that typically signals further upside if key support levels hold.
Momentum indicators such as the Relative Strength Index and the Moving Average Convergence Divergence remained in positive territory, suggesting buyers are still active despite heightened volatility.
Analysts note that defending the psychological $95,000 level will be critical in maintaining confidence.
While Thursday’s figures marked a sharp slowdown, market participants caution against reading too much into a single day of data.
Bitcoin ETF inflow has surged over recent weeks as institutional adoption expanded, and temporary pauses are common during periods of policy uncertainty.
What makes this episode notable is how quickly sentiment shifted in response to legislative developments. As Bitcoin ETFs mature into core institutional instruments, their flows are increasingly acting as a real-time barometer for regulatory confidence.
For now, investors appear to be waiting for clearer signals from Washington before committing additional capital.
Whether Bitcoin ETF inflow rebounds in the coming sessions may depend less on price action and more on lawmakers’ ability to break the current stalemate.
One thing is clear: in today’s market, regulation and capital flows are no longer separate conversations as they are deeply intertwined.
