Bitcoin ETFs See Record $938M Daily Outflow as Price Retreats #CriptoNews

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• US Bitcoin ETFs recorded $937.9 million in outflows on February 25, their largest single-day exodus
• Fidelity’s FBTC experienced the highest outflow at $344.7 million
• Bitcoin price fell 3.4% in a day, dropping to $86,140 from over $92,000
• February has seen $2.4 billion exit Bitcoin ETFs with only four days of positive flows
• Analysts suggest many ETF investors are hedge funds pursuing arbitrage strategies

US spot Bitcoin ETFs just marked their biggest outflow day since launching. On February 25, investors pulled $937.9 million from these funds, continuing a six-day streak of money leaving Bitcoin investment products.

The outflows coincided with Bitcoin’s price sliding below $90,000. Over 24 hours, the cryptocurrency dropped from $92,000 to as low as $86,140, representing a 3.4% decline that rattled some investors.

Fidelity’s Wise Origin Bitcoin Fund (FBTC) led the exit, with $344.7 million withdrawn in a single day. This set a new record for the fund. BlackRock’s iShares Bitcoin Trust (IBIT) saw the second-largest outflow at $164.4 million.

Several other funds felt the impact too. Bitwise Bitcoin ETF (BITB) lost $88.3 million, while Grayscale’s funds combined for $151.9 million in outflows. Franklin Templeton’s EZBC shed $74.07 million, and Invesco Galaxy’s BTCO saw $62.01 million leave. Smaller funds like Valkyrie’s BRRR, WisdomTree’s BTCW, and VanEck’s HODL also recorded outflows ranging from $9.97 million to $25.19 million.

Market Concerns Drive February Outflows

February has been tough for Bitcoin ETFs, with investors pulling roughly $2.4 billion throughout the month. Only four trading days saw any net inflows, highlighting a shift in investor sentiment.

Despite the money flowing out, trading volume surged by nearly 167% compared to the previous day, reaching $7.74 billion. Since their introduction, these ETFs have still gathered a total net inflow of $38.08 billion, showing their overall popularity remains strong.

The recent selling pressure seems linked to Bitcoin breaking below the key $90,000 level. There’s also concern about President Trump’s planned 25% tariffs on Canadian and Mexican imports starting in March. These tariffs might boost inflation and slow economic growth, potentially affecting Fed policy.

The Federal Reserve has maintained it will only cut interest rates when inflation approaches its 2% target. However, recent economic indicators suggest inflation might actually be increasing, not decreasing.

On-chain data shows more Bitcoin moving to exchanges while large investors, called “whales,” are reducing their holdings in non-exchange wallets. This pattern often indicates preparation for selling.

The amount of Bitcoin held by funds is also dropping, suggesting institutional investors are scaling back their cryptocurrency holdings. This matches the pattern seen in Bitcoin ETFs, which have recorded outflows on 12 of the past 16 trading days.

Industry experts have pointed out that many Bitcoin ETF investors aren’t buying for long-term holding. BitMEX co-founder Arthur Hayes and 10x Research head Markus Thielen both claim most ETF investors are hedge funds seeking arbitrage profits.

These funds typically buy ETF shares while shorting CME futures contracts to earn yields higher than those from short-term Treasury bonds. When this “basis” yield decreases along with Bitcoin’s price, these funds sell their ETF positions and repurchase CME futures.

ETF Store President Nate Geraci expressed frustration with traditional finance’s reaction to Bitcoin’s downturn. On social media he wrote, “still amazed at how much TradFi hates Bitcoin and crypto” and noted the “huge victory laps at every downturn.” He added, “Hate to break it to you, but no matter how big drawdowns are, it’s not going away.”

Hayes predicted Bitcoin could fall to $70,000 as spot ETF outflows continue. However, Thielen explained that the unwinding process is “market-neutral” because it involves selling ETFs while simultaneously buying Bitcoin futures, which “effectively offset any directional market impact.”

Matt Mena, a crypto research strategist at 21Shares, believes this is just a temporary setback. He told crypto.news that both on-chain and macro indicators suggest the market remains in the early-to-mid bull cycle.

Mena emphasized that despite the current dip, crypto is still up over 50% compared to last year. With Bitcoin now 18% below its recent peak, he views this correction as a “temporary reset—not the end of the cycle.”

He suggests this dip offers a good entry point for investors who hesitated after the election. “Historically, crypto has punished those who hesitate at key dips. The window for accumulation may not last long,” Mena warned.

These outflows mark a stark contrast to the excitement that surrounded the ETF launches earlier this year. However, the overall positive net inflow of $38.08 billion suggests continued strong institutional interest in Bitcoin despite short-term market movements.

Some market watchers note that volatility is normal in cryptocurrency markets. They suggest the current outflows may simply be part of a typical market cycle rather than indicating a fundamental shift in how investors view Bitcoin as an asset class.

Trading patterns show that while some investors are withdrawing funds, others see this as a buying opportunity. This dynamic creates the high trading volumes seen recently, even as net flows remain negative.

The current market behavior also fits with historical Bitcoin performance, where price corrections of 15-20% are common during broader bull market cycles. Many long-term holders view these periods as healthy consolidation before potential future advances.

Exchange data indicates that while some short-term traders are taking profits, long-term wallet addresses continue to accumulate Bitcoin. This divergence in behavior between different investor types often appears during periods of market uncertainty.

Recent regulatory developments, while not directly causing the current price action, continue to shape the broader environment for Bitcoin and related investment products. The regulatory clarity provided by ETF approvals remains a positive factor for institutional adoption despite short-term price volatility.