After five weeks of consecutive outflows, US spot Bitcoin ETFs have rebounded with $744 million in net inflows this week. On Monday, March 17, ETFs saw a $274 million inflow, which was the highest daily figure in over a month.

This rebound suggests that institutional investors are coming back to the Bitcoin market as macroeconomic factors have priced in. However, BTC still remains below the $90,000 threshold.  

Bitcoin ETFs Start Recovering from a $5 Billion Loss

US Bitcoin ETFs lost over $5.3 billion since the second week of February. The month was particularly brutal for ETFs, with a record-breaking $3.5 billion in outflows.

The sharp sell-off was attributed to institutional investors liquidating their holdings amid market volatility and shifting macroeconomic conditions. However, March has signaled a turnaround, with inflows steadily increasing over the past week.

With macroeconomic concerns easing, institutional investors appear to be regaining confidence in the market. The week began on a strong note, with Bitcoin ETFs recording $274 million in inflows on Monday.

The positive momentum persisted, culminating in six straight days of net inflows. On March 21 alone, the ETFs saw a total net inflow of $83.09 million.

BlackRock’s IBIT led the way, recording up to $150 million in positive flows on Friday. Meanwhile, all other issuers remained stagnant. The only outlier was Grayscale’s GBTC, which continued its trend of outflows, losing $21.9 million that day.

This shift suggests that institutional players may be positioning themselves for a potential market recovery. Crypto influencer and Open4Profit founder Zia ul Haque pointed to this resurgence, questioning whether institutional investors are acting on inside knowledge.

“Institutes started Accumulating Again: Do they know something?! Bitcoin ETF saw a positive inflow for the last consecutive 5 days! This is the major consecutive inflow this month. From the beginning of March, giants sold BTC heavily which created a massive panic and price dump in the market. But in the last few days, they are accumulating again. This could be a good sign for the market,” ul Haque wrote.

His observation aligns with the steady recovery in ETF inflows and Bitcoin’s price action, which continues to defend against further downside.

However, despite the positive ETF flows, not everyone shares the bullish outlook and optimism for Bitcoin’s price recovery. Some analysts think that Bitcoin ETF inflows do not clearly reflect resuming buyer interest.

Institutional trading strategies are potentially experiencing structural shifts. Hedge funds often leverage a low-risk arbitrage strategy involving Bitcoin spot ETFs and CME futures.

“The ETF ‘demand’ was real, but some of it was purely for arbitrage. There was a genuine demand for owning BTC, just not as much as we were led to believe. Until real buyers step in, this chop & volatility will continue,” popular analyst Kyle Chasse explained.

If this structural shift continues, it could influence market stability despite the recent return of ETF inflows.

As of this writing, Bitcoin is trading at around $84,148. It is down by a modest 0.46% in the last 24 hours, failing to reflect optimism amid the recent uptick in Bitcoin ETF investments.

Meanwhile, Ethereum ETFs continue to post negative flows, with net inflows in 12 consecutive trading days (over two weeks).

Bitcoin was once considered the dominant currency in illicit transactions. However, it is now being replaced by privacy-focused cryptocurrencies like Monero (XMR), Zcash (ZEC), Dash, and stablecoins.

The primary reason for Bitcoin’s decline in illegal activities is its transparency.

Reasons for the Shift from Bitcoin to Privacy Coins

Bitcoin (BTC) once dominated illicit activities on the Dark Web, such as Nucleus Marketplace or Brian’s Club. The report from TRM Labs indicated that Bitcoin accounted for 97% of the total cryptocurrency volume associated with illegal activities in 2016.

However, by 2022, this figure had dropped sharply to just 19%, indicating a significant shift toward other cryptocurrencies. 

According to the TRM Labs’ report, illegal cryptocurrency activities involving Bitcoin will drop to just 12% by 2024. Tron (TRX) holds the top position with 58%. In another report from Chainalysis, stablecoins now account for the majority of total illicit transaction volume at 63%. The use of Bitcoin in illegal activities also recorded a significant decline.

White House Market, one of the largest Dark Web marketplaces, stopped accepting Bitcoin and exclusively used Monero (XMR) for transactions in 2020. 

“The Bitcoin workaround was supposed to be there just to help with transition to XMR and as we are concerned, it’s done, therefore we are now Monero only, just as planned,” stated White House Market.

Elliptic researchers uncovered $11 billion in illicit trades using USDT on Cambodia’s Huione Guarantee marketplace in July 2024. Japanese law enforcement tracked Monero, marking the country’s first arrest linked to Monero transaction analysis.

The decision was driven by Bitcoin’s limitations, particularly its blockchain transparency. This move reflected a strategic shift in Dark Web markets and highlighted the rise of privacy coins like Monero, which are designed to provide enhanced anonymity.

The Popularity of Privacy Coins on the Dark Web

The decline of Bitcoin in illegal activities is not coincidental but rather stems from its inherent limitations. First and foremost, Bitcoin’s blockchain is a public ledger. When combined with additional data such as IP addresses or exchange records, every transaction can be tracked.

This transparency has enabled law enforcement agencies like the FBI to use blockchain analytics tools from Chainalysis and Elliptic to dismantle major Dark Web markets. Examples include the Silk Road shutdown in 2013, AlphaBay in 2017, Hydra in 2022, and Incognito Market in 2024.

Additionally, Bitcoin faces technical challenges, including high transaction fees and slow confirmation times. In contrast, privacy coins like Monero, Zcash, and Dash leverage advanced technologies to ensure high levels of anonymity, making transaction tracking extremely difficult. The Research from ScienceDirect suggests that privacy coins are closely linked to Dark Web traffic, further increasing their popularity in illicit markets.

The Two Sides of the Shift to Privacy Coins

On the positive side, Bitcoin’s declining role in illegal activities may improve its reputation as a legitimate financial tool. This could lead to wider acceptance and attract more users and investors.

However, the shift from Bitcoin to privacy coins and stablecoins has made it more challenging for law enforcement agencies to track and prevent illegal transactions. Despite advanced blockchain analytics tools that can detect transaction trails through mixers and tumblers, dealing with Monero and other privacy coins remains a significant challenge.

Global regulators are increasingly scrutinizing privacy coins and stablecoins. Some countries have outright banned privacy coins, while stablecoins are subjected to stricter oversight.

The transition from Bitcoin to privacy coins and stablecoins on the Dark Web is a clear trend, driven by the growing demand for anonymity and efficiency in illicit transactions. While Bitcoin still plays a role in certain crypto-related crimes, its transparency makes it less attractive to the Dark Web.

Meanwhile, Monero, Zcash, Dash, and stablecoins have become the preferred choices due to their enhanced security and privacy. This trend poses significant challenges for law enforcement agencies while driving advancements in blockchain analytics tools. 

However, it also raises concerns about using cryptocurrencies in illegal activities, necessitating a balance between technological innovation and regulatory oversight to ensure transparency and security in the digital financial ecosystem.

Many analysts predicted an increase in Bitcoin in this cycle to levels higher than $200,000. However, the fall of cryptocurrency at the end of February — March 2025 forced market participants to revise their forecasts

BeInCrypto Russia team interviewed Gracy Chen, the CEO of Bitget. She revealed that Bitcoin (BTC) still has the strength to surge beyond the $200,000 milestone.

US Government Might Start Buying Bitcoin Soon – Bitget CEO

Chen drew attention to the fact that many were puzzled by the fall of Bitcoin against the background of the pro-crypt rhetoric of the current US President, Donald Trump. She noted that in America, they began to realize the idea of forming a strategic Bitcoin reserve.

“So far, the government is not purchasing BTC, but this may change soon. Such a step will give cryptocurrency institutional legitimacy and give long-term price support,” Chen told BeInCrypto.

Meanwhile, Chen drew attention to a bill progressing in Congress on stablecoins. In her opinion, the initiative signals a serious transition to a financial system based on blockchain.

“Some major players, including Elon Musk, are considering issuing their own stablecoins, and Trump’s team sees stablecoins as a way to strengthen the dollar’s status as the global reserve currency,” Chen further explained.

She also discussed the US economy’s situation. America’s Minister of Finance, Scott Bessent, hinted at a controlled economic downturn. If this is true, the expert is sure that Trump’s strategy is clear: blame Biden for the recession, use tariffs and crypto narratives to contain costs and seek to reduce interest rates to stimulate the growth of technology and AI.

“Short-term pain for long-term gain—that’s the plan,” Chen stated.

Since Bitcoin’s position largely depends on macroeconomics, investors have to monitor Trump’s actions.

“Regardless, I don’t see BTC below $70,000, rather $73-78,000, which is a good entry point for those who are hesitant. Within the next 1-2 years, BTC at $200,000 no longer seems impossible,” Chen concluded.