In a most unfortunate turn of events, the esteemed spot Bitcoin exchange-traded funds in the United States have recorded their highest daily outflows, akin to a hasty retreat from a ball where one has stepped upon the toes of a particularly irate partner. This occurred as the price of Bitcoin, that once-glorious digital currency, fell below the rather alarming threshold of $90,000, inciting a most palpable risk-off sentiment among investors, who, it seems, are now more concerned with macroeconomic matters than with their own fortunes.
According to the rather alarming data provided by SoSoValue, the twelve spot Bitcoin (BTC) ETFs experienced a staggering total of $937.78 million in net outflows on the 25th of February—an outflow so significant that it has surpassed the previous record of $680 million, which was recorded on the 19th of December in the year 2024. One might say it is a day that shall live in infamy!
The majority of these outflows, it appears, were attributed to Fidelity’s FBTC, which saw a rather dramatic $344.65 million exit the fund, marking its highest daily outflow since its inception. BlackRock’s IBIT followed closely behind, with a respectable $164.37 million in net redemptions. It seems that the investors have taken to their heels with great alacrity!
While the data for ARK 21Shares’ ARKB was regrettably unavailable at the time of this report, other ETFs that recorded outflows included:
- Bitwise’s BITB: $88.3 million
- Grayscale’s Mini Bitcoin Trust: $85.76 million
- Franklin Templeton’s EZBC: $74.07 million
- Grayscale’s GBTC: $66.14 million
- Invesco Galaxy’s BTCO: $62.01 million
- Valkyrie’s BRRR: $25.19 million
- WisdomTree’s BTCW: $17.3 million
- VanEck’s HODL: $9.97 million
Despite this rather disheartening sell-off, one must note that the daily trading volume for spot Bitcoin ETFs surged nearly 167% from the previous day, reaching a rather impressive $7.74 billion. Since their launch, these ETFs have still managed to accumulate a net inflow of $38.08 billion overall, which is a feat worthy of a toast, if one were so inclined.
Market factors driving the sell-off
The ongoing sell-off appears to be driven by Bitcoin’s descent below the critical $90,000 level, alongside the rather alarming concerns regarding Mr. Donald Trump’s proposed tariffs on Canadian and Mexican goods, which are set to take effect in March. If a 25% tariff on U.S. imports is enforced, it could lead to higher inflation and a rather sluggish economic growth, thus placing pressure on the Federal Reserve to respond. The Fed has maintained that it shall only cut interest rates when inflation moves closer to its 2% target, but alas, recent data suggests inflation is moving in the opposite direction—much like a wayward suitor!
On-chain data signals increased selling pressure
On-chain data from Santiment reveals that more Bitcoin is moving onto exchanges, while the holdings of whales in non-exchange wallets are declining. This shift suggests that those large investors, who were once accumulating BTC with the fervor of a young lady collecting compliments, are now transferring their holdings to exchanges, which often signals potential selling pressure. A key metric, BTC supply held by funds, is also dropping, indicating that institutional investors are reducing their Bitcoin holdings. This aligns with the negative net flows in spot Bitcoin ETFs, which have seen outflows on 12 of the last 16 trading days, totaling approximately $2.41 billion since early February. Quite the scandal, I daresay!
Analyst insights: Is this just a temporary dip?
In a rather insightful commentary on the downturn in BTC ETFs, one Matt Mena, a crypto research strategist at 21Shares, has suggested that while some investors fear Bitcoin has reached its zenith, both on-chain and macro indicators imply that the market is still in the early-to-mid bull cycle. Mena noted that despite this pullback, crypto remains up over 50% from the previous year, demonstrating a resilience that would make even the most steadfast of characters proud.
With Bitcoin now down 18% from its recent highs, Mena views this correction as a “temporary reset—not the end of the cycle.” He believes it presents a strategic re-entry point for investors who may have hesitated to enter the market after the election. “Historically, crypto has punished those who hesitate at key dips. The window for accumulation may not last long,” Mena concluded, leaving us all to ponder the wisdom of his words.
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2025-02-26 10:20