Bitcoin ETFs Bleed Record $1.1B in Single Day as Crypto Market Rout Deepens

Bitcoin ETFs experienced their worst day ever on Tuesday, with a record high of over $1.1 billion in combined outflows as the price of the largest cryptocurrency by market value plummeted in a broader market rout. This followed outflows of $539 million on Monday, which was the sixth-highest total in the funds' nearly 14-month history.

According to UK asset manager Farside Investors, the drop in Bitcoin ETFs was largely due to a volatile market and a broader selloff in risk assets. However, the ETFs still managed to maintain more than $100 billion in assets, with outflows representing only about 2.3% of total assets.

Analysts have attributed the outflows to various factors, including the Bybit hack, crypto-specific issues, and an unwinding of the basis trade. The 11 Bitcoin ETFs have shed more than $2 billion in assets across February, as investors have become increasingly concerned about inflation, potential trade wars, and global conflicts.

Despite the recent turmoil, flows for U.S.-listed crypto ETFs remain in positive territory this year, at $3.1 billion. However, Bitcoin and other high-cap coins have experienced significant price drops, with Bitcoin falling below $84,000 on Wednesday for the first time since November.

Geoffrey Kendrick, global head of digital assets research at U.K.-based bank Standard Chartered, remained cautious about crypto markets, despite earlier comments suggesting that investors might buy a dip when daily ETF outflows reached $1.1 billion. Kendrick now believes that the selloff is not yet over, and that Bitcoin could sink to the low $80,000 range.