FameEX Hot Topics | US Spot Bitcoin ETFs Witness Record $938M Daily Outflow

Bitcoin funds faced substantial outflows on February 25, with CoinGlass reporting a net withdrawal of $937.9 million from 11 ETFs. This marked the sixth consecutive trading day of outflows. The decline occurred as Bitcoin’s price tumbled by 3.4% over 24 hours, hitting a low of $86,140 after peaking above $92,000 earlier in the day.

Among these ETFs, Fidelity’s Wise Origin Bitcoin Fund (FBTC) led the losses, experiencing a record $344.7 million in outflows. BlackRock’s iShares Bitcoin Trust (IBIT) followed with $164.4 million withdrawn. Bitwise’s Bitcoin ETF (BITB) shed $88.3 million, while Grayscale’s two funds lost a combined $151.9 million—$66.1 million from its Bitcoin Trust (GBTC) and $85.8 million from the Bitcoin Mini Trust ETF (BTC). Overall, Bitcoin ETFs have seen $2.4 billion in outflows so far this month, with only four days of net inflows.

Nate Geraci, President of the ETF Store, commented on social media about the traditional financial sector’s disdain for Bitcoin. He noted that every market downturn seems to bring “victory laps” from critics, yet argued that despite significant drawdowns, Bitcoin is not going away. His remarks reflect ongoing skepticism and division between institutional investors and the crypto community.

Meanwhile, Markus Thielen, head of research at 10x Research, explained that many Bitcoin ETF investors are hedge funds pursuing arbitrage opportunities rather than long-term BTC holdings. Thielen suggested that if spot ETF outflows persist, Bitcoin’s price could drop to $70,000. He added that many IBIT holders use a strategy of going long on ETFs and shorting CME futures to achieve yields higher than short-term Treasurys. As BTC prices decline and the basis yield shrinks, these hedge funds are likely to unwind their positions, selling IBIT shares while buying back CME futures.

Thielen emphasized that this unwinding process is largely market-neutral. While it involves selling ETFs and purchasing Bitcoin futures, the two actions effectively cancel each other out, preventing significant directional impact on the broader market. This dynamic illustrates how ETF arbitrage activity can create sizable movements in fund flows without necessarily affecting the underlying Bitcoin market’s trajectory.

Disclaimer: The information provided in this section is for reference only and does not represent any investment advice or the official views of FameEX.