CoinShares: Bitcoin ETF Inflows Mask Institutional Demand

CoinShares reported that US spot Bitcoin ETFs attracted roughly $4.1 billion in September, with BlackRock’s iShares Bitcoin Trust ETF (IBIT) receiving more than 53% of that total.

The firm cautioned that aggregate ETF inflows do not reveal how much of the demand came from institutional investors because flows can reflect arbitrage, hedging and other trading strategies as well as purchases for exposure.

James Butterfill, head of research at CoinShares, reported the industry saw about $3.5 billion of inflows across crypto investment products over the five trading days before Sept. 25, and that IBIT was the largest single recipient.

On whether institutions are returning to crypto, Butterfill wrote: “Potentially yes, but in the ETF world it is very difficult to disaggregate institutional and retail money.”

CoinShares described a common institutional approach known as the basis trade: buying shares of a spot Bitcoin ETF while shorting Bitcoin futures to capture the yield as spot and futures prices converge. The firm estimated that trade currently offers an approximate yield of 6%.

Later data from CoinShares put US crypto investment product inflows for September at about $4.44 billion, compared with $4.53 billion globally. Bitcoin products led with $2.84 billion, followed by Ether at about $946 million and Zcash at $284 million.

The research team also flagged a rotation toward companies that earn revenue from crypto adoption. CoinShares recorded more than $100 million flowing into blockchain equities in early September and pointed to firms in tokenization, payments and trading infrastructure as areas drawing investor attention.

Butterfill highlighted estimates that stablecoin assets could approach $4 trillion by the end of the decade and cited reports of daily trading volumes on Hyperliquid reaching up to $9 billion.

CoinShares’ commentary limited its conclusions to the data, noting that clearer signals of institutional participation will come from observing which companies and products generate revenue as related markets develop.