Decreased Demand for Bitcoin ETFs Amid U.S. Shutdown Optimism

The ongoing lack of interest in spot Bitcoin exchange-traded funds (ETFs) is raising questions about the future of Bitcoin as the year progresses, despite the expectation that the U.S. government is on the verge of concluding its 41-day shutdown.

Key Takeaways

The demand for spot Bitcoin ETFs remains low despite potential end of the U.S. government shutdown.
U.S. Senate passed a funding package, paving the way for a House vote that could occur soon.
Bitcoin ETF inflows were just $1.2 million on Monday, indicating flat investment activity.
Analysts classify the current market situation as a mid-cycle consolidation rather than an end to the bull market.

On Monday, the U.S. Senate approved a funding package, which brings Congress closer to resolving the shutdown. The legislation is now set for a full vote in the House of Representatives, likely taking place as early as Wednesday, as reported by CBS News. Senate Majority Leader John Thune expressed optimism that the passage may take "hours, not days," during a Senate meeting, according to the Military Times.

Despite the positive news from the U.S., spot Bitcoin ETF investments remained stagnant on Monday, attracting only $1.2 million, according to data from Farside Investors.

Bitcoin ETF Flows, US dollars (in millions). Source: Farside Investors

Charles Edwards, founder of Capriole Investments, noted, "Despite the U.S. shutdown seemingly coming to an end, and the S&P and Gold having a strong rebound, Bitcoin ETFs saw NO bid yesterday." He emphasized that this trend is not ideal and warned that "risk assets usually see strong bids in the weeks following a shutdown." Edwards stated in a Tuesday X post, "There’s still time to turn this ship around, but it needs to happen."

Spot Bitcoin ETF inflows have been the main driver behind Bitcoin’s momentum in 2025, according to Geoff Kendrick, Standard Chartered’s global head of digital assets research.

Source: Vetle Lunde

Among ETF providers, BlackRock's fund stands out, recording positive year-to-date inflows of $28.1 billion, while other issuers collectively experienced $1.27 million in outflows, as reported by Cointelegraph on October 28.

Bitcoin ETF demand stalls as US shutdown optimism fails to lift sentiment

Market Outlook: Mid-Cycle Consolidation or End of the Bull Market?

While there are concerns among some investors regarding a potential end to the bull market cycle, analysts at Bitfinex see the current situation as a "mid-cycle consolidation phase" rather than a significant downturn.

"The current correction has a structure that closely resembles those of June 2024 and February 2025, both of which were key inflection points where Bitcoin fluctuated between recovery and a deeper contraction," the analysts shared with Cointelegraph. They mentioned that around 72% of Bitcoin's supply remained profitable even when prices hit $100,000, which signals a positive indicator for a mid-cycle consolidation. However, they stressed that an overall recovery would require "renewed inflows of demand" from both institutional and retail investors.

Solana ETF Flows, USD, million. Source: Farside Investors

In terms of other cryptocurrency ETFs, Ether ETFs also showed flat performance on Monday, while Solana ETFs attracted $6.8 million in investments, marking their tenth consecutive day of net inflows, according to Farside Investors.

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