On February 24, U.S. spot Bitcoin ETFs faced unprecedented outflows as market sentiment soured, leading to what analysts are calling the worst single-day outflow since January 8. Fidelity's FBTC was particularly hard hit, losing approximately $247 million as part of overwhelming sell-offs noted across multiple funds.
According to data gathered by SoSoValue, the twelve recorded spot Bitcoin ETFs witnessed outflows totaling $516.41 million for the day—an astonishing surge of over 700% from the previous day’s outflows of $62.77 million. BlackRock’s IBIT also suffered significant losses, with redemptions amounting to $158.59 million. Notably, all funds reported no inflows during this tumultuous period, indicating widespread panic among investors.
Other major funds felt the strain too, with Grayscale’s GBTC recording outflows of $59.5 million, followed by several others such as: An additional $15.02 million from the Investco Galaxy’s BTCO, $12.5 million from WisdomTree’s BTCW, and lesser amounts from Bitwise’s BITB and VanEck’s HODL.
Despite these dramatic outflows, trading volume across these ETFs remained high at approximately $2.9 billion on the same day, underscoring the volatile nature of the cryptocurrency sector. Since their launch, these ETFs have still seen net inflows amounting to $39.04 billion, though these figures came under scrutiny as investors reevaluated their positions.
Evidence suggests the troubles for Bitcoin ETFs were not isolated, as Ethereum ETFs also encountered significant outflows. Ethereum funds experienced losses totaling $78.09 million compared to just $8.92 million the previous day. BlackRock’s ETHA accounted for the most significant withdrawals, pulling $48.21 million from the market, complemented by Grayscale’s ETHE, which saw $15.45 million redeemed.
The broader market environment at the time of these outflows was concerning. Bitcoin has struggled to find firm direction, hovering within the narrow range of $94,000 to $98,000 for most of February. This stagnation was disrupted over the weekend, following unsettling news about the theft of over $1.4 billion worth of Ethereum and related tokens from the Bybit exchange. On Monday, Bitcoin's price dipped to $88,614, representing an 18.5% decrease from its all-time high of $108,786, which coincided with Donald Trump's inauguration.
Adding to the uncertainty was MicroStrategy's recent purchase announcement of 20,356 BTC, bringing the company’s total holdings to nearly 500,000 BTC. Despite these investments, they haven't spurred upward momentum within the market.
Looking at the political horizon, one month has passed since Donald Trump began his second term, with investors hoping he would replicate his previous influence on the crypto market. Currently, betting odds on Polymarket reflect only a 10% probability of Trump establishing a strategic Bitcoin reserve within his first 100 days. Meanwhile, the White House has seemingly relaxed its stance, indicating it is still deliberative on the matter of Bitcoin stockpiling.
Overall, these developments indicate there is still considerable volatility within the cryptocurrency environment, as investors are left waiting to see how regulatory shifts and macroeconomic factors will shape the future of Bitcoin and Ethereum ETFs.