Bitcoin ETFs Face $937.9M Outflow as Price Drops Below $90K

US Bitcoin ETFs experienced a significant setback on February 25, with a record $937.9 million in single-day outflows. This marked the sixth consecutive trading day of money leaving the funds, as Bitcoin's price dropped below the $90,000 mark.

Fidelity's Wise Origin Bitcoin Fund (FBTC) led the outflows with $344.7 million, while BlackRock's iShares Bitcoin Trust (IBIT) followed with $164.4 million. Other funds, including Bitwise's Bitcoin ETF (BITB) and Grayscale's two funds, also saw substantial outflows.

February has been a challenging month for Bitcoin ETFs, with approximately $2.4 billion exiting the funds. Despite the recent exodus, trading volume for these spot Bitcoin ETFs surged 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 and growing fears about potential economic impacts of proposed tariffs. On-chain data suggests that more Bitcoin is moving onto exchanges, and institutional investors are cutting back on their Bitcoin holdings.

Analysts and industry experts have pointed out that many Bitcoin ETF investors are hedge funds seeking arbitrage yields rather than long-term Bitcoin investors. These hedge funds typically go long on ETFs while shorting CME futures to earn a higher yield than short-term US Treasury bonds.

Despite the recent pullback, some market observers believe that the current situation offers a strategic re-entry point for investors. The overall net inflow figure suggests that there remains strong institutional interest in Bitcoin as an asset class, and periods of volatility are common in crypto markets.