Bitcoin News Today: Institutional Confidence Cracks as Bitcoin ETFs Lose $1 Billion

The recent surge in Bitcoin's price has sparked speculation about whether the cryptocurrency has reached a peak, particularly given the institutional-led nature of the current rally. Unlike previous rallies, which were often driven by retail investors and speculative trading, this movement has been supported by significant inflows into Bitcoin spot exchange-traded funds (ETFs), particularly the iShares Bitcoin Trust ETF (IBIT) and the Fidelity Wise Origin Bitcoin Fund (FBTC). These two products, launched in January 2024, have dominated the U.S. market for Bitcoin ETFs, amassing over $111 billion in combined assets under management (AUM) as of mid-2025. However, recent data has highlighted growing caution among investors, with market indicators and trading activity suggesting underlying fragility.

The iShares Bitcoin Trust ETF (IBIT) has consistently outperformed its counterpart, Fidelity’s FBTC, in terms of trading volume and liquidity. IBIT’s average daily trading volume frequently exceeds $2 billion, compared to FBTC’s roughly $500 million. This disparity makes IBIT the preferred vehicle for institutional investors and high-volume traders, who benefit from tighter bid-ask spreads—averaging 0.02% for IBIT versus 0.04% for FBTC. Both ETFs charge an expense ratio of 0.25%, making them among the most cost-efficient ways to gain Bitcoin exposure. However, IBIT’s superior liquidity gives it an edge for active traders who rely on quick execution and minimal slippage.

Despite their similarities in structure and performance, the two ETFs differ in their custodial arrangements and investor appeal. IBIT is backed by BlackRock and relies on Coinbase Prime for custody, while FBTC is managed by Fidelity and stores Bitcoin in-house using its Fidelity Digital Assets division. This distinction has led to different user preferences—long-term investors, particularly those with retirement accounts, often favor FBTC for its integration with Fidelity’s ecosystem. Meanwhile, traders and institutional investors lean toward IBIT due to its higher trading volume and tighter spreads. These ETFs have also helped normalize Bitcoin investing, offering a regulated, accessible alternative to direct crypto ownership, especially for those unfamiliar with managing digital wallets.

Recent on-chain and market data suggest that the current Bitcoin rally is showing signs of weakening momentum. According to Glassnode, the RSI for Bitcoin has moved toward oversold territory, and cumulative selling pressure has deepened, signaling fragile buyer conviction. In the derivatives market, open interest in Bitcoin futures has contracted, while funding rates on exchanges like Binance have remained elevated despite a declining spot price. This divergence highlights a growing disconnect between bullish sentiment in leveraged trading and Bitcoin’s actual price trajectory. Elevated funding rates indicate that long-position holders are paying a premium for the expectation of a rebound, but if the downward trend continues, the risk of cascading liquidations becomes a real concern.

The fragility of the current market is further reflected in ETF flows, which have turned negative in recent weeks. US-listed Bitcoin ETFs, including IBIT and FBTC, recorded a sharp $1.0 billion outflow, signaling a cooling in institutional demand after months of inflows. On-chain metrics, such as daily active addresses and transaction fees, also show a decline in organic network activity, while the STH/LTH (short-term to long-term holder) supply ratio indicates modest short-term rotation but little long-term conviction. These trends suggest that while speculative repositioning continues, broader demand is softening.

Looking ahead, the market’s direction will likely depend on whether fresh liquidity enters the market to stabilize prices or if the current consolidation deepens. If long-term holders continue to accumulate discounted Bitcoin during this shakeout, it could lay the groundwork for a stronger foundation for the next rally. However, the risk of further selling pressure remains high, particularly if funding rates remain elevated and leveraged long positions face liquidation. For now, the institutional-led rally appears to be at a critical juncture, with market structure shifting from euphoria toward caution.

Source:

[1] title1 (https://cryptonews.com/cryptocurrency/ibit-vs-fbtc/)

[2] title2 (https://insights.glassnode.com/btc-market-pulse-week-34-2/)

[3] title3 (https://cryptopotato.com/traders-keep-betting-on-bitcoin-but-funding-rates-warn-of-trouble-ahead/)

[4] title4 (https://cryptodnes.bg/en/bitcoin-shakeout-new-investors-capitulate-while-strong-hands-accumulate/)