Bitcoin ETFs Face $937M Outflows as Price Plummets Below $88,500

Bitcoin ETFs in the United States have witnessed a significant decline in institutional interest, with six consecutive days of outflows totaling $937 million on Tuesday alone. This marks the largest single-day outflows since the inception of these products. The outflows have coincided with a sharp drop in the price of Bitcoin, which has fallen below $88,500 and extended its weekly losses to over 7.52%. This trend has contributed to an overall crash in the crypto market.

The Bitcoin exchange-traded product (ETP) market has experienced its largest-ever single-day net outflow, with 14,579 BTC withdrawn globally. According to Velte Lunde, Head of Research at K33 Research, the ETFs have faced sustained selling pressure throughout February, with 69% of the month's trading days seeing net outflows. This consistent reduction in investor exposure to Bitcoin ETFs reflects a cautious market sentiment amid broader crypto market volatility.

On Tuesday, Fidelity’s FBTC led the total ETF outflows with $344 million, while BlackRock’s IBIT saw $144 million in outflows. Fidelity has recorded outflows for six consecutive days in a row. Investors have pulled $1.7 billion from cryptocurrency exchange-traded products (ETPs) and exchange-traded funds (ETFs) this week so far.

CryptoQuant analyst Amr Taha reported a notable spike in Bitcoin exchange activity, with the “Exchange Inflow (Top 10)” metric exceeding 5,000 BTC three times in a single day following the release of the U.S. Consumer Confidence report. The increased inflows suggest potential selling pressure as large holders or institutions may be moving Bitcoin to exchanges for liquidation. This could potentially trigger further outflows from Bitcoin ETFs ahead.

BitMEX co-founder Arthur Hayes has suggested that Bitcoin could retrace to pre-election levels between $70,000 and $75,000 if former President Donald Trump fails to pass his proposed budget, which includes increased spending and a debt ceiling hike. As of press time, BTC price is trading at $88,488 with daily trading volumes dropping to $68 billion.