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BTC 
ETH Why is the inflow of cryptocurrency ETF funds accelerating?
Last week, U.S. spot Bitcoin and Ethereum ETFs attracted a total of US$1.1 billion in net funds, setting a record for the highest weekly inflows of funds between these two types of ETFs since April. Despite relatively weak trading volumes, institutional demand has improved.
Spot Bitcoin ETF
Spot Bitcoin ETF attracted a total of approximately US$853.5 million in net inflows over five consecutive trading days, the largest weekly total since the week of April 17, when net inflows reached US$996.4 million. The spot Ethereum ETF attracted an additional $244.9 million, also posting its best weekly performance since April.
Demand for Bitcoin funds was strongest at the beginning and mid-week. A net inflow of $244.4 million was recorded on Wednesday, followed by $211.5 million on Tuesday. It added $128.7 million on Thursday and brought in another $98.9 million on Friday. BlackRock's IBIT dominates Bitcoin ETF funding flows, attracting $693.7 million, accounting for more than 80% of the category's weekly total. Fidelity's FBTC increased by $116.4 million, accounting for another 13%. These two Bitcoin funds, with the largest assets under management, jointly absorbed most of the new funds.
This concentration of funds is noteworthy because it shows that investors still prefer the most mature and liquid products when returning to cryptocurrency ETFs. Smaller funds may benefit from improving market sentiment, but the latest inflow cycle remains highly concentrated on market leaders.
Has the cold wallet vulnerability incident driven demand for Bitcoin ETFs?
Eric Balchunas, senior ETF analyst at Bloomberg Industry Research, attributed part of the influx to the cold wallet vulnerability. He pointed out that since the vulnerability was made public, IBIT, FBTC and several other funds have recorded net inflows of funds every day. The flaw was discovered on July 30 and has resulted in at least $111 million in theft, while estimated losses could exceed $130 million. The incident also triggered extremely active on-chain transactions, with about 890,000 bitcoins transferred in seven days, setting a new high since 2026.
Security incidents affecting cold storage could make regulated ETFs more attractive to investors who want to gain exposure to Bitcoin but do not want to directly manage hardware wallets and private keys. This provides a partial reasonable explanation for the surge in Bitcoin capital inflows. However, the same argument cannot fully explain the overall recovery of ETFs. The Ethereum Fund also posted its best weekly performance since April, and Ethereum holders were not affected by the vulnerability of a specific hardware wallet targeting Bitcoin. The Ethereum ETF's latest capital inflow cycle also began days after the cold wallet vulnerability was disclosed. This suggests that broader institutional cryptocurrency demand is improving, and not just a shift from self-custody to Bitcoin ETFs.
Investor Enlightenment
The cold wallet vulnerability incident may have prompted some Bitcoin investors to prefer regulated custody methods, but the simultaneous inflow of Ethereum funds suggests that the scope of increased demand for ETFs this time is broader than a single security incident. The more important test is whether the inflow will continue when this immediate concern subsides.
Why is Ethereum ETF gaining momentum?
The spot Ethereum ETF has now recorded net inflows for five consecutive weeks, setting its longest winning streak since 2026. Last Thursday, the Ethereum ETF recorded its best single-day performance with a net inflow of $92.2 million, while Monday's net outflow of $11.4 million was the only negative value that week. As of last Friday, the funds held net assets of $10.74 billion, while cumulative net inflows were $11.46 billion. That means investors have a total book loss of about $711 million on a market basis, although the gap has narrowed significantly from a level of about $2 billion in mid-June.
Large Ethereum holders also continue to increase their holdings. According to blockchain data, the total position of wallets holding 10,000 to 100,000 ETH has increased from approximately 14 million ETH in mid-2025 to a record of 19.6 million ETH. The combination of ETF inflows and whale holdings could indicate that large investors are rebuilding their positions in Ethereum after a difficult first half. Whether this trend can be sustained will largely depend on the sustainability of price performance and institutional demand.
Why is low trading volume still a warning sign?
The rebound in inflows has not been accompanied by increased ETF trading activity. Last week, total trading volume of Bitcoin ETFs was approximately US$8.19 billion, down 9% from the previous week's US$9.02 billion and the second lowest full trading week since October 2024. Trading volume of the Ethereum ETF fell even faster, down about 21% month-on-month to about US$2.38 billion. This means that although new funds have entered these products, secondary market activity has not increased accordingly.
Despite the recent recovery, the overall performance of these funds in 2026 to date is still negative. Since the beginning of the year, the Bitcoin ETF has recorded a net outflow of approximately US$4.44 billion, while the Ethereum ETF has a net outflow of approximately US$873 million. Bitcoin rose about 3% last week, with weekend trading prices approaching $65100; Ethereum fluctuated around $1920. U.S. employment data released last Friday was lower than expected, which also lowered market expectations for a September interest rate hike and improved the macro environment for risky assets. However, most ETF purchases occurred before the release of the economic data, and Thursday and Friday were the two trading days with the weakest Bitcoin inflows among five consecutive trading days.
The next question for investors is: Is the latest demand the beginning of a new cycle of continuous allocation, or is it just a strong rebound after months of outflows?
