Glassnode Report: BTC, ETH Flows Stabilize, ETFs Show Recovery

Glassnode’s April 2026 “Strategy Watch” report highlights a cautious stabilization in Bitcoin (BTC) and Ethereum (ETH) capital flows, a recovery in ETF demand, and persistent challenges for market-neutral strategies. While institutional appetite remains tepid, the report offers critical insight into the evolving dynamics of digital asset markets.

BTC and ETH Capital Flows Improve

March saw net outflows for both Bitcoin and Ethereum, but the pace of capital flight slowed meaningfully. BTC outflows totaled -$7.0 billion for the month, improving from February’s -$9.6 billion. Similarly, ETH outflows eased to -$1.6 billion, a marked recovery from the -$3.2 billion seen mid-February. Stablecoin inflows moderated significantly, ending March at +$2.6 billion, down from a prior peak of +$6.2 billion earlier in the month.

The data suggests institutional de-risking is losing steam, but conviction in spot markets remains fragile. This aligns with broader market sentiment, where macro uncertainty and regulatory headwinds continue to weigh on sustained inflows.

ETF and DAT Demand Rebound

One bright spot was the recovery in Bitcoin and Ethereum exchange-traded fund (ETF) and digital asset trust (DAT) flows. BTC ETF flows flipped positive in March, peaking at +30.6k BTC mid-month before closing at +17.6k BTC. DAT flows followed a similar pattern, ending March at +30.9k BTC. Ethereum saw a more measured shift, with ETF flows reaching +46.6k ETH and DAT flows closing at +261.9k ETH after mid-month peaks.

While these inflows signal renewed institutional interest, the mid-month surge and subsequent pullback highlight sensitivity to broader market conditions rather than a structural shift in demand.

DeFi and Yield Strategies Face Headwinds

Ethereum’s decentralized finance (DeFi) sector staged a notable recovery in March. Total value locked (TVL) flows, which had seen outflows of $17.8 billion in February, nearly neutralized by month-end at -$0.75 billion. While flows briefly turned positive mid-month, sustained inflows are required to confirm a reversal of the prolonged contraction that began in August 2025. Institutional allocators continue to approach on-chain yield strategies with caution, reflecting broader DeFi market challenges.

On the yield front, Bitcoin’s CME basis yield turned negative in March, closing at -$3.9 million. This inversion signals that futures are trading below spot prices, effectively erasing the carry trade opportunity for market-neutral strategies. Ethereum’s basis yield remained subdued but showed modest recovery, ending at +$0.9 million.

Institutional Allocators Show Selective Interest

The report notes that a $6 billion pension fund increased its crypto exposure in March, underscoring selective but meaningful institutional participation. However, the broader allocator community remains cautious, with conviction tied closely to macroeconomic and regulatory developments.

Outlook: Stabilization, Not Reversal

While March’s data paints a picture of stabilization, it falls short of signaling a robust recovery. Institutional demand for Bitcoin and Ethereum remains sensitive to external conditions, and market-neutral strategies face significant structural challenges. For investors, this underscores the importance of monitoring ETF flows, basis yields, and DeFi TVL as leading indicators of sentiment shifts in digital assets.

For more details, read the full Glassnode report here.