- U.S. spot Bitcoin ETFs experienced six consecutive days of negative flows, with a record outflow of $938M.
- With only four days of net inflows, February has seen over $2.4B exit U.S. Bitcoin ETFs.
U.S. spot Bitcoin exchange-traded funds (ETFs) faced a significant setback on February 25, reporting their largest-ever daily net outflow of approximately $938 million. This downturn follows a broader crypto market rout that has seen Bitcoin’s price falter, trading below the crucial $90,000 mark.
In total, the 11 Bitcoin funds experienced a cumulative net outflow of $937.9 million, marking their sixth consecutive day of negative flows, according to Sosovalue. This troubling trend comes as Bitcoin’s value dipped by 3.4% over the last day, reaching a low of $86,140 from an intraday high of over $92,000.
Notably, the Fidelity Wise Origin Bitcoin Fund (FBTC) led the outflows with a staggering $344.7 million. Meanwhile, BlackRock’s iShares Bitcoin Trust (IBIT) followed closely, losing $164.4 million.
Additionally, the Bitwise Bitcoin ETF (BITB) saw a decline of $88.3 million, while Grayscale’s two funds accounted for a combined loss of $151.9 million. Grayscale’s Bitcoin Trust (GBTC) lost $66.1 million, and the Bitcoin Mini Trust ETF (BTC) lost $85.8 million. So far in February, over $2.4 billion has exited these ETFs, with only four days of net inflows noted.
Market Dynamics Drive Bitcoin ETF Outflow
ETF Store President Nate Geraci commented on the situation, expressing amazement at the traditional finance sector’s ongoing skepticism toward Bitcoin and crypto. He noted that despite downturns, Bitcoin’s long-term viability remains intact. Analysts like BitMEX co-founder Arthur Hayes have pointed out that many Bitcoin ETF investors are hedge funds seeking arbitrage yields rather than long-term holders.
Hayes predicted that if outflows continue, Bitcoin could dip to $70,000. He explained that hedge funds often go long on ETFs while shorting CME futures to generate higher yields, but this strategy falters when yields decrease, prompting these funds to sell their ETF positions.
Research from 10x Research head of research Markus Thielen supports this, indicating that over half of the spot Bitcoin ETF investors engage in arbitrage trading. According to Thielen, this unwinding process is market-neutral and minimizes directional market impact.
Overall, the record outflows from U.S. spot Bitcoin ETFs reflect not only market volatility but also the strategic adjustments by institutional investors in response to shifting market conditions.
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