Institutional investors are leading the way in building positions, with BTC and ETH ETFs recording their best week since October—what does this signify?

U.S.-listed spot Bitcoin and Ethereum ETFs recorded their strongest week in the past three months. Market participants are paying close attention to what this movement might indicate ahead of time. Both ETFs together attracted several billion dollars in new capital inflows, which is a significant signal suggesting strategic positioning by institutional investors.

Capital Inflows Reveal Institutional Investors’ Movements

Last week, 11 spot Bitcoin ETFs experienced a net inflow of $1.42 billion, the largest since the second week of October. BlackRock’s spot Bitcoin ETF “IBIT” alone garnered $1.03 billion, making it the central figure in this inflow.

During the same period, Ethereum spot ETFs also saw strong demand. The sector recorded a weekly inflow of $479 million, the highest since early October. BlackRock’s “ETHA” attracted $219 million, demonstrating its strong appeal.

Year-to-date, Bitcoin ETFs have achieved a total capital inflow of $1.21 billion, and Ethereum ETFs have attracted $589 million, indicating a high level of institutional investor interest heading into 2026.

Moving Away from Cash-and-Carry Arbitrage

The significance of these inflow patterns goes beyond short-term trading; they reflect a long-term return of institutional capital to the market. CoinDesk’s Market Insight Model analyzes this movement as follows:

Traditionally, some institutional investors utilized a strategy called “cash-and-carry” arbitrage. This involves taking long positions in ETFs and short positions in CME futures simultaneously to profit from the yield differential. However, in recent years, this yield has been losing its attractiveness, and it appears that institutional investors are now moving away from this strategy.

What does this shift mean? It indicates that institutional investors are proactively expanding their exposure to Bitcoin and Ethereum ahead of regulatory clarifications expected in Q1 2026 and macroeconomic changes.

Correlation Between Price Movements and Market Structure

Actual price trends support this analysis. Bitcoin has risen about 6% this month, currently trading near $87.83K. Ethereum has also increased approximately 8%, maintaining around $2.93K.

These price movements show a strong correlation with ETF capital inflows, indicating that institutional capital is actively driving market structure, rather than just retail investor sentiment.

As CoinDesk points out, this pattern differs significantly from the situation in the second half of 2025. Despite experiencing outflows of several billion dollars by the end of 2025, Bitcoin struggled. This divergence between sentiment and price was notable. Now, that divergence is narrowing, and the fact that institutional investors are regaining market leadership is a serious development.

On-Chain Indicators Show Market Depth

A closer look at market structure reveals a more complex landscape. About 63% of invested Bitcoin assets are acquired at a cost basis exceeding $88,000. At the current price level of around $87.83K, many institutional investors are still in a loss position.

On-chain indicators also reveal an interesting supply concentration between $85,000 and $90,000. Meanwhile, support below $80,000 is thin, highlighting a skewed market hierarchy.

Foundations for the First Half of 2026

The shift from outflows at the end of 2025 to large inflows this week indicates that institutional investors see the coming months as a critical turning point. Whether this capital inflow can sustain its current momentum will be key for Bitcoin and Ethereum to achieve significant price increases.

The market is now awaiting further regulatory developments. The fact that institutional investors are proactively building positions could significantly influence market dynamics after Q1 2026. The upcoming weeks to months of capital flow trends will be crucial in confirming this hypothesis.