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

Bitcoin funds witnessed a significant withdrawal of $937.9 million on February 25, marking their sixth straight day of outflows. According to CoinGlass data, the losses coincided with a 3.4% drop in Bitcoin’s price over 24 hours. The cryptocurrency fell from an intraday high of over $92,000 to a low of $86,140, reflecting increased market unease.

Among the ETFs, Fidelity’s Wise Origin Bitcoin Fund (FBTC) experienced the largest outflow, recording $344.7 million in redemptions—setting a new record for the ETF. BlackRock’s iShares Bitcoin Trust (IBIT) followed with $164.4 million in outflows. The Bitwise Bitcoin ETF (BITB) saw $88.3 million withdrawn, while Grayscale’s two funds suffered a combined outflow of $151.9 million, split between $66.1 million from its Bitcoin Trust (GBTC) and $85.8 million from its Bitcoin Mini Trust ETF (BTC). In total, $2.4 billion has exited Bitcoin ETFs so far in February, with net inflows recorded on only four days this month.

Nate Geraci, President of the ETF Store, shared his views on the outflows via social media, highlighting the skepticism that persists among traditional financial players regarding Bitcoin. He remarked that critics often celebrate downturns in the cryptocurrency market, but maintained that Bitcoin remains resilient and isn’t going away. His comments reflect a broader divide between institutional investors and the crypto community over Bitcoin’s long-term viability.

10x Research’s head of research, Markus Thielen, provided insight into the motivations behind these large outflows. Thielen explained that many Bitcoin ETF investors are hedge funds engaged in arbitrage rather than long-term investments. These funds often go long on ETFs while shorting CME futures to capture a yield higher than short-term Treasurys. However, when Bitcoin’s price falls and the basis yield diminishes, these funds tend to unwind their positions by selling ETFs and buying back futures.

Thielen also emphasized that this unwinding process is essentially market-neutral. The simultaneous selling of ETFs and buying of futures offsets any substantial market impact. This activity demonstrates how ETF arbitrage strategies can generate substantial fund flow movements without heavily influencing the underlying Bitcoin market’s direction, even during significant price corrections.

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