Why Bitcoin Rises with Inflows into ETFs. How It Actually Works

Spot exchange-traded funds (ETFs) for Bitcoin in the U.S. recorded a significant influx of capital in August and September 2026. This coincided with a rise in Bitcoin of over 30%.

In total, $6.25 billion flowed into Bitcoin ETFs over the two months. This is comparable to the inflows observed in the fall of 2025 before Bitcoin soared to its historical maximum of around $126,000.

Inflows and outflows in spot exchange-traded funds (ETFs) for Bitcoin in the U.S. Source: SoSoValue

As of the trading session on September 28, only $31 million flowed into Bitcoin ETFs, but capital outflows in recent days have been virtually nonexistent, according to data from SoSoValue.

Meanwhile, the price of Bitcoin also rose over the two months. Starting a sharp ascent from $60,000 in mid-August, it fluctuated above $80,000—at its highest levels since the beginning of the year.

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The increase in capital inflows at the end of the third quarter of 2026 is also recorded by ETFs for other cryptocurrencies. Over the past two years, funds for Ethereum (ETH), XRP (XRP) from Ripple, Solana (SOL), Dogecoin (DOGE), Chainlink (LINK), Avalanche (AVAX), Hedera (HBAR), Litecoin (LTC), Polkadot (DOT), Hyperliquid (HYPE), and BNB (BNB) from Binance have been launched. Almost all of them are in the black as of the end of August and the incomplete September.

Total inflows and outflows in spot exchange-traded funds (ETFs) for cryptocurrencies in the U.S. Source: SoSoValue

In August, the funds for LTC and BNB were slightly in the red. They lost about $250,000 each. In September, $1.8 million was withdrawn only from the ETF for HYPE.

How Capital Movement through ETFs Affects Cryptocurrency

The launch of cryptocurrency ETFs in the U.S. in 2024 and the subsequent influx of institutional capital became one of the factors driving market growth. By purchasing ETF shares, investors effectively create demand for cryptocurrency, as ETF issuers buy it to back the issued shares.

ETFs have allowed large capital to enter crypto through regulated exchange instruments and avoid the risks of self-custody of coins. Investors gain exposure to Bitcoin by purchasing ETF shares from another market participant through a broker.

If demand for the fund's shares grows to the extent that market makers require additional share volume, an "authorized participant" enters the process. They transfer money to the fund to create new shares, after which the fund or its trading counterparty buys the corresponding amount of Bitcoin with those funds. In another scenario, known as in-kind creation, the participant themselves transfers the necessary amount of Bitcoin to the fund and receives new ETF shares in return.

At the stage of requesting share issuance, demand for Bitcoin arises. If investors have put an additional $500 million into the fund and Bitcoin needs to be purchased for a comparable amount to issue new shares, an additional buyer appears in the market. The ETF itself does not necessarily buy cryptocurrency directly on the exchange; this can be done by its counterparty or another participant in the chain.

The reverse process occurs during capital outflows. Investors sell ETF shares, the authorized participant redeems the corresponding shares, and the fund either sells the necessary amount of Bitcoin and returns the money or transfers the Bitcoin itself to the participant. As a result, there may be additional cryptocurrency supply in the market.

The influx of $1 billion into ETFs does not automatically mean the purchase of bitcoin for exactly $1 billion at the same moment. Some transactions occur between investors on the secondary market, and the creation and redemption of shares depend on the actions of authorized participants. Therefore, it is more accurate to say that significant inflows into spot ETFs create an additional channel of demand for cryptocurrency, while outflows can create reverse pressure.

Fund Assets

In total, the combined value of net assets (AUM) of all American spot crypto ETFs (for BTC, ETH, XRP, SOL, DOGE, LINK, AVAX, HBAR, LTC, DOT, HYPE, and BNB) currently exceeds $130 billion.

Total net assets of spot exchange-traded funds (ETFs) for cryptocurrencies in the USA. Source: SoSoValue.

Of the total amount, bitcoin funds account for $107.8 billion, while Ethereum ETFs hold $17.6 billion. The AUM of Solana funds is nearly $2 billion, XRP ETFs have $1.7 billion, and HYPE ETFs hold $502 million. The net assets of other funds for each individual cryptocurrency do not exceed $230 million.

A sharp spike in interest was noted in the middle of the month for Solana ETFs. From September 21 to 25, they received over $188 million — the highest since October last year. In contrast, DOGE funds do not attract much attention. One of them, BWOW from Bitwise, was closed in early September.

Timing of Purchase and Market Price of Cryptocurrency

Sometimes on-chain analysts record large inflows of bitcoin to wallets that they designate as belonging to, for example, BlackRock's ETF (IBIT). They interpret these inflows as "BlackRock is buying bitcoin en masse."

However, such a transfer does not necessarily mean that the purchase occurred at that moment. Bitcoin could have been acquired earlier and only then transferred to the fund's wallet.

Such transfers allow tracking changes in ETF reserves but do not show the exact time of purchase and do not mean that it could have influenced the market price of bitcoin at that moment. It is the net inflows and outflows of funds that reflect the process of creating and redeeming shares and the associated demand or supply of bitcoin.

"RBC-Crypto" does not provide investment advice; the material is published solely for informational purposes. Cryptocurrency is a volatile asset that can lead to financial losses.