Bitcoin News Today: Crypto ETFs Weather $3.8B Exodus as Investors Flee Macro Uncertainty

Bitcoin and Ethereum spot ETFs experienced significant outflows in the latest trading session, with U.S. investors withdrawing a combined $3.8 billion from the funds, signaling heightened caution amid macroeconomic uncertainties and shifting risk appetites. The Bitcoin spot ETF saw a net outflow of $3.728 billion, led by BlackRock's IBIT fund, which lost $523.2 million, while the Ethereum ETF recorded $74.2 million in redemptions, with BlackRock's ETHA fund accounting for $165.1 million of that decline according to Moomoo.

The outflows mark the second-largest single-day redemption for Bitcoin ETFs since their January 2024 launch, trailing only the $1.1 billion withdrawal on Feb. 25. The exodus accelerated as Bitcoin prices fell below $90,000, a seven-month low, and Ethereum dropped 4% to $3,056 according to The Block. Analysts attribute the selloff to a combination of factors, including the resolution of a prolonged U.S. government shutdown, which reduced expectations for a December Federal Reserve rate cut, and a broader rotation of capital into cash, bonds, and gold according to CryptoSlate.

The redemptions were amplified by derivatives market dynamics. After Bitcoin's October rally to $126,000, long futures positions had swollen, leading to cascading liquidations as spot prices dipped below $100,000. This triggered approximately $190 million in Bitcoin longs and over $300 million in crypto assets being liquidated, further pressuring ETFs as institutional risk limits were triggered. Meanwhile, newly launched altcoin ETFs-such as those for XRP, Solana, and Litecoin-attracted inflows, suggesting some investors are reallocating risk toward alternative narratives.

Despite the outflows, structural integrity in the ETF products remains intact. The authorized participant mechanism functioned smoothly, enabling efficient exits for institutions and demonstrating the liquidity advantages of spot ETFs compared to pre-ETF crypto exposure methods according to CryptoSlate. Total assets under management in Bitcoin ETFs remain above $80 billion, with the $2.6 billion in three-week redemptions representing just 3% of holdings according to CryptoSlate.

Notably, Harvard University's endowment added a contrasting data point by disclosing a $443 million stake in BlackRock's IBIT, its largest equity position and a rare institutional bet on a crypto ETF according to CoinDesk. The investment, comprising 6.8 million shares of IBIT, accounts for 20% of the university's U.S.-listed public equity holdings and highlights growing institutional acceptance of crypto-backed assets despite market volatility according to CoinDesk.

The market's risk-off sentiment has also pushed Bitcoin into negative year-to-date territory, with prices testing critical support levels. Analysts warn that sustained outflows could deepen the correction, potentially triggering broader altcoin sell-offs and reduced market liquidity. However, the ETFs' ability to process large-scale redemptions without operational disruption underscores their role as a stabilizing force in crypto markets.

As the sector navigates this period of de-risking, the coming weeks will be pivotal in determining whether the outflows signal a capitulation bottom or a prolonged consolidation phase. Investors will closely watch for stabilization above key price levels and any shifts in macroeconomic conditions that might justify renewed risk-taking.