Bitcoin's Struggle to Break $90,000 Amid ETF Outflows and Macro Headwinds

Bitcoin's inability to breach the $90,000 psychological barrier in 2025 has sparked renewed debates about its role in institutional portfolios and its resilience against macroeconomic headwinds. While the approval of spot Bitcoin ETFs in early 2024 catalyzed a 400% surge in institutional flows, the year ended with mixed signals. By Q3 2025, global Bitcoin ETFs had attracted $12.5 billion in net inflows, reflecting structural demand. However, late December saw a $825 million outflow over five days, driven by tax loss harvesting, portfolio rebalancing, and a quarterly options expiry event. This volatility underscores a broader tension: institutional investors are grappling with Bitcoin's correlation to traditional markets and shifting capital toward safer assets.

Institutional Disengagement and ETF Dynamics

The first quarter of 2025 marked a 23% decline in professional holdings of Bitcoin ETFs, dropping to $21.2 billion from $27.4 billion in Q4 2024. This decline outpaced the overall ETF market's 12% drop and coincided with a 11% price correction in Bitcoin. While advisors retained 22.9% of total Bitcoin ETF AUM as of Q1 2025, hedge funds reduced their exposure by nearly one-third. This strategic repositioning highlights a nuanced shift: long-term allocators and advisors are maintaining exposure, but short-term traders and speculative capital are retreating.

BlackRock's IBIT, the largest Bitcoin ETF with $50 billion in AUM, exemplifies this duality. Despite a 9.6% negative return for the year, IBIT attracted $25.4 billion in net inflows. However, November-December 2025 brought a $333 million outflow from IBIT, synchronized with a broader correction in Bitcoin and the S&P 500. The growing correlation between Bitcoin and equities-from 0.88 in January to 92% by September 2025-has eroded Bitcoin's appeal as a standalone hedge, pushing institutions to diversify into traditional safe havens.

Shifting Capital Toward Safe-Haven Assets

Institutional flows in 2025 reveal a clear reallocation toward gold and U.S. Treasuries. Gold ETFs, including the SPDR Gold Trust (GLD), saw a 26.8% year-to-date increase in bullion holdings, reaching a 4.9-year high of 1,739 metric tons. This surge outpaced Bitcoin ETF inflows, despite Bitcoin's price decline. Meanwhile, U.S. Treasury bond ETFs like the iShares 20+ Year Treasury Bond ETF (TLT) faced $631 million in outflows during Q4 2025, reflecting rising 30-year Treasury yields. The contrast between gold's resilience and Treasury outflows underscores a preference for tangible assets amid inflationary pressures and hawkish Federal Reserve policies.

Macro Headwinds and the Path Forward

Bitcoin's struggle to break $90,000 is compounded by macroeconomic factors. The Federal Reserve's tightening cycle, coupled with inflation concerns, has dampened risk appetite, forcing institutions to prioritize liquidity and stability. While Bitcoin's integration into traditional portfolios continues-evidenced by 57% of reported Bitcoin ETF holdings being managed by U.S. investment advisors in Q3 2025-its role as a "digital gold" is being challenged by physical gold's performance.

Looking ahead, the 2026 outlook hinges on regulatory clarity, liquidity conditions, and macroeconomic alignment. Bitcoin models predict a 70% chance of a significant breakout if real yields ease and risk appetite rebounds. However, the path remains fraught with challenges, including the need to decouple from equities and reassert Bitcoin's unique value proposition in a crowded asset landscape.

Conclusion

Bitcoin's 2025 journey reflects both progress and peril. While institutional adoption has normalized Bitcoin as a mainstream asset, macro headwinds and shifting capital flows toward gold and Treasuries highlight its vulnerabilities. For Bitcoin to reclaim its narrative as a store of value, it must navigate these challenges while demonstrating resilience in a rapidly evolving financial ecosystem.