The 12 exchange-traded Bitcoin products (ETFs) in the United States reversed sharply last week, posting net outflows of $1.2 billion.
According to SoSoValue factsthis was their second-biggest weekly setback since launching in January 2024.
The pullback ended a two-week inflow that had brought in more than $5 billion, a period that many read as evidence of a deepening of institutional conviction.
SoSoValue data shows that investors have withdrawn capital from almost every major issuer. BlackRock’s IBIT recorded outflows of $276 million, while Fidelity’s FBTC saw $169 million outflows.
Other major issuers, such as ARK Invest’s ARKB and Bitwise’s BITB, lost $290 million and $128 million respectively, while Grayscale’s two funds lost $321 million.
The reversal followed a volatile week for Bitcoin, which briefly fell below $104,000 during the reporting period. Remarkably, this was the lowest price level since June.
Industry experts linked the decline to macroeconomic conditions caused by the tariff wars between the US and China, which shook confidence in risky assets such as Bitcoin.
However, the flagship digital crypto asset has surged above $110,000 at the time of writing, amid recent market developments.
London’s countermove
As US flows turned defensive, another story was unfolding across the Atlantic that would reshape retail access for Bitcoin.
On October 20, Bitcoin exchange-traded notes (ETNs) officially began trading on the London Stock Exchange. This marks the end of Britain’s three-year retail ban on crypto investment products.
BlackRock led the debut with its iShares Bitcoin ETP, along with other leading issuers such as Bitwise.
Meanwhile, initial feedback on these products has been mixed, but they are still showing promising signs.
ByteTree founder Charlie Morris said Initial trading activity showed “success with platforms such as Interactive Investor, Swissquote and Trading 212,” although some brokers such as AJ Bell were slower to support access.
Still, Bradley Duke, the head of Europe at Bitwise, says thought that the launch of these products would mark a “big week” for retail investors because the “direction of travel is clear for crypto.”
There’s a $600 billion inflow coming in?
With a new wave of adoption emerging across the Atlantic and renewed institutional focus on Bitcoin, Galaxy Research believes crypto investment products could attract up to $600 billion in new inflows as traditional financial institutions broaden distribution.
According to the company, the US advisory market represents a huge, largely untapped opportunity that would drive significant flows into BTC. It declared:
“Approximately 300,000 financial advisors manage approximately $30 trillion in client assets. If even a modest 2% allocation to bitcoin ETFs were to emerge through this channel, that would translate into potential inflows of roughly $600 billion.”
This wave of flows would rival the entire global gold ETF market, which is now worth approximately $472 billion, and quadruple the combined $146 billion in assets under management (AUM) of US spot Bitcoin funds.
The asset management firm pointed out that recent policy moves by leading traditional financial institutions such as Morgan Stanley and Vanguard support this statement.
Notably, Morgan Stanley recently recommended an allocation of up to 4% to digital assets, while Vanguard is reportedly looking to offer select third-party crypto ETFs to its brokerage clients.
These developments are expected to drive new capital into the emerging industry and further drive Bitcoin adoption.
Galaxy Research argued that the full opening up of major advisory platforms could mark a structural shift in the way digital assets are integrated into the mainstream financial sector.
Once this access is fully enabled, financial advisors will be able to incorporate crypto directly into traditional balanced portfolios, moving the asset class from retail-driven speculation to advisor-led portfolio construction.
It was noted:
“The impact could be substantial. New inflows could follow as asset managers start allocating to the asset class, which could push the total bitcoin ETF AUM to $500 billion within a few years, assuming an average allocation of just 1% across managed portfolios. Such flows would reshape market dynamics and reshape bitcoin’s position as a mainstream, investable asset strengthen.”
Galaxy’s analysis further suggested that this transition could also deliver a more mature form of liquidity.
According to the company, advisory-driven allocations typically follow longer holding periods and stricter compliance frameworks, reducing the short-term turnover that has defined retail crypto trading.
Over time, that discipline could improve price stability, deepen liquidity and align Bitcoin more closely with traditional asset classes like stocks, bonds and gold.