US Bitcoin ETFs Record $938M in Single-Day Outflows as Price Drops

TLDR

• US spot Bitcoin ETFs recorded largest-ever daily outflow of $937.9 million on February 25
• Fidelity’s FBTC led with $344.7 million in outflows, followed by BlackRock’s IBIT with $164.4 million
• Total February outflows reached approximately $2.4 billion with only four days of net inflows
• Bitcoin price dropped 3.4% in 24 hours, falling from over $92,000 to a low of $86,140
• Many ETF investors are hedge funds seeking arbitrage yields rather than long-term Bitcoin investors

The US spot Bitcoin exchange-traded funds (ETFs) have just set a new record for daily outflows. On February 25, these investment products saw a combined net outflow of $937.9 million, marking their sixth straight trading day of money leaving the funds.

This massive withdrawal happened as Bitcoin’s price dropped below the $90,000 mark. In just 24 hours, Bitcoin fell 3.4%, hitting a low of $86,140 after trading as high as $92,000 earlier in the day.

Fidelity’s Wise Origin Bitcoin Fund (FBTC) took the biggest hit with $344.7 million flowing out – setting a new record for that particular fund. BlackRock’s iShares Bitcoin Trust (IBIT) came in second place with outflows of $164.4 million.

Other funds also saw money leaving. The Bitwise Bitcoin ETF (BITB) lost $88.3 million, while Grayscale’s two funds together lost $151.9 million. This was split between $66.1 million from its Grayscale Bitcoin Trust (GBTC) and $85.8 million from its Bitcoin Mini Trust ETF (BTC).

Franklin Templeton’s EZBC saw $74.07 million in outflows, while Invesco Galaxy’s BTCO lost $62.01 million. Smaller outflows were recorded for Valkyrie’s BRRR ($25.19 million), WisdomTree’s BTCW ($17.3 million), and VanEck’s HODL ($9.97 million).

February Trends and Volume Surge

February has been a tough month for Bitcoin ETFs overall. The 11 funds have seen about $2.4 billion exit during the month, with only four trading days showing any net money coming in.

Despite the recent exodus, trading volume for these spot Bitcoin ETFs jumped by nearly 167% from the previous day, reaching $7.74 billion. Since their launch, these ETFs have still managed to accumulate a total net inflow of $38.08 billion.

The ongoing sell-off appears to be connected to Bitcoin breaking below the $90,000 level. There are also growing fears about potential economic impacts of Donald Trump’s proposed 25% tariffs on Canadian and Mexican goods, which are set to take effect in March.

Still amazed how much tradfi hates bitcoin & crypto…

Huge victory laps w/ every downturn.

Hate to break it to you, but no matter how big drawdowns are, it’s not going away.

You can either fight it or educate yourself.

Most in tradfi will fight it.

— Nate Geraci (@NateGeraci) February 26, 2025

These tariffs could potentially lead to higher inflation and slower economic growth, putting pressure on the Federal Reserve. The Fed has stated it will only cut interest rates when inflation moves closer to its 2% target, but recent data suggests inflation is moving in the opposite direction.

On-chain data from Santiment shows more Bitcoin is moving onto exchanges, while holdings in non-exchange wallets controlled by large investors (known as “whales”) are declining. This often signals that big players might be preparing to sell.

Another key measurement, Bitcoin supply held by funds, is also dropping. This suggests that institutional investors are cutting back on their Bitcoin holdings. This matches the pattern of Bitcoin ETF outflows, which have happened on 12 of the last 16 trading days.

Analysts and industry experts have pointed out that many Bitcoin ETF investors aren’t actually long-term Bitcoin believers. BitMEX co-founder Arthur Hayes and 10x Research head Markus Thielen have both suggested that the majority of these investors are hedge funds looking for arbitrage opportunities.

These hedge funds typically go long on ETFs while shorting CME futures to earn a yield higher than what they could get from short-term US Treasury bonds. When the “basis” yield falls along with Bitcoin’s price, these funds unwind their ETF positions and buy back CME futures.

ETF Store President Nate Geraci commented on social media that he was “still amazed at how much traditional finance hates Bitcoin and crypto” noting 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 on February 24 that Bitcoin could drop to $70,000 as outflows from spot ETFs continue. However, Thielen explained that the unwinding process is “market-neutral” since it involves selling ETFs while simultaneously buying Bitcoin futures, “effectively offsetting any directional market impact.”

Matt Mena, a crypto research strategist at 21Shares, told crypto.news that while some investors fear Bitcoin has reached its peak, both on-chain and macroeconomic indicators suggest the market is still in the early-to-mid bull cycle.

Mena noted that despite this pullback, crypto is still up over 50% from last year, showing its long-term resilience. 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 the current situation offers a strategic re-entry point for investors who waited too long after the election.

“Historically, crypto has punished those who hesitate at key dips. The window for accumulation may not last long,” Mena concluded.

The February outflows represent a sharp contrast to the enthusiasm that greeted the launch of these ETFs earlier in the year. However, the overall net inflow figure suggests that despite short-term fluctuations, there remains strong institutional interest in Bitcoin as an asset class.

Some market observers point out that periods of volatility are common in crypto markets, and the current outflows might simply represent a typical market cycle rather than a fundamental change in investor sentiment toward Bitcoin.