Bitcoin ETF flows reach $536 million as on-chain activity slows, CryptoQuant says

Traditional finance capital is flowing into Bitcoin through ETFs while crypto-native on-chain activity decelerates, marking a structural market shift, according to CryptoQuant's CEO.

Bitcoin fell 3.26% to $73,035 on May 28 as a structural divergence emerged between rising ETF demand and declining crypto-native on-chain activity, according to CryptoQuant data.

"Bitcoin is undergoing a structural shift where traditional finance capital flows in through ETFs while crypto-native on-chain activity is slowing down," Ki Young Ju, CEO at CryptoQuant, said.

U.S. spot Bitcoin ETFs have recorded $536 million in net inflows year-to-date, though the recent trend has turned negative with eight consecutive sessions of outflows totaling more than $2 billion since mid-May. A $1.3 billion dark pool sale of BlackRock's iShares Bitcoin Trust on May 26 pushed BTC down 1.5% on impact and deepened institutional selling pressure. Despite the near-term outflows, ETF holdings declined only 3.6% during Bitcoin's 36% price correction from late 2025 to early 2026, according to JPMorgan — suggesting holders treated the products as long-term allocations rather than trading vehicles. Bitcoin's 24-hour trading volume exceeded $40 billion, with a market cap of $1.46 trillion.

The shift changes how Bitcoin's price floor is set. ETF-driven demand is more sensitive to macro conditions — interest rates, dollar strength, and regulatory clarity — than to on-chain metrics like active addresses or transaction counts. If the CLARITY Act, which advanced out of the Senate Banking Committee on a 15-9 vote on May 14, becomes law, Standard Chartered projects Bitcoin ETFs could attract $4 billion to $8 billion in additional inflows, potentially overwhelming the overhead supply that has capped BTC below $78,000.

ETF Outflows Mask a Structural Build

Year-to-date net inflows of $536 million are well below April's record monthly haul of $2.44 billion, and the eight-day outflow streak has erased much of the early 2026 accumulation. Swissblock's Risk Index has moved into high-risk territory, with apparent demand near its weakest reading since December. Yet during the late 2025 to early 2026 correction, when Bitcoin fell 36%, ETF holdings dropped only 3.6%, per JPMorgan. The $1.3 billion IBIT dark pool sale on May 26 was executed by an anonymous entity and appears to have been a single large liquidation rather than a trend shift.

On-Chain Slowdown vs. Institutional Infrastructure

On-chain transaction counts, active addresses, and decentralized exchange volumes have all contracted from their Q1 2026 peaks, according to CryptoQuant. Meanwhile, institutional infrastructure continues to expand. CME Group listed futures for Avalanche and Sui on May 29, adding to its Cardano, Chainlink, and Stellar contracts from February. Coinbase routed $25.5 million into the pro-crypto Fairshake super PAC, and Ripple committed over $20 million as the industry pushes for regulatory clarity ahead of the 2026 midterms. Resistance sits at $77,500 to $78,000, where multiple moving averages converge, while support at $73,000 must hold to avoid a test of $70,500. The next catalyst is the CLARITY Act's full Senate vote, with prediction markets placing passage odds at 62% to 66% for 2026.

This article is for informational purposes only and does not constitute investment advice.