Bitcoin ETFs suffer record $1.1 billion net outflows as investors turn risk-averse

Key Takeaways

Bitcoin ETFs recorded a record $1.1 billion net outflows amid a sell-off driven by macroeconomic concerns.
The crypto market’s downturn is fueled by investors’ risk aversion due to tariff threats and inflation concerns.

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US spot Bitcoin ETFs posted around $1.1 billion in net outflows on Tuesday, their largest single-day outflow since launch, according to data from Farside Investors. So far this week, the group’s net outflows have surged to over $1.6 billion.

The massive withdrawal continued during a sharp crypto market sell-off, with investors retreating from risk assets in dealing with growing macroeconomic concerns after President Trump’s tariff threats.

Fidelity’s FBTC led the exodus with around $344 million in outflows, followed by BlackRock’s IBIT with almost $162 million in redemptions and ARK Invest’s ARKB with $126 million.

Meanwhile, Bitwise’s BITB and Grayscale’s BTC each recorded over $85 million in net outflows.

Franklin Templeton’s EZBC lost $74 million, with Grayscale’s GBTC and Invesco’s BTCO declining by $66 million and $62 million respectively.

Competing funds managed by Valkyrie, WisdomTree, and VanEck also reported net outflows.

Intense outflows eclipsed the previous record set on Dec. 19, when the group of spot Bitcoin ETFs saw nearly $672 million in withdrawals after Bitcoin sank below $97,000.

The withdrawals surpassed the previous record of $672 million set on December 19, marking the sixth consecutive day of outflows for the ETF group, which saw $539 million withdrawn on Monday.

Bitcoin touched $86,000 today, its lowest level since November, and currently trades at $88,000, down 7% over the past week, per TradingView. The total crypto market cap has declined 3.5% over the past 24 hours.

The steep decline across all assets triggered $1.6 billion in leveraged liquidations on Monday, Crypto Briefing reported.

Former BitMEX CEO Arthur Hayes warned of a potential market downturn as hedge funds unwind their basis trades involving Bitcoin ETFs.

“Lots of $IBIT holders are hedge funds that went long ETF short CME futures to earn a yield greater than where they fund, short term US treasuries,” Hayes said. He cautioned that if Bitcoin’s price falls, “these funds will sell $IBIT and buy back CME futures.”

The market turmoil follows President Trump’s reactivation of tariffs on goods from Mexico and Canada, which reignites inflation fears, pushing investors away from risk assets.

The Crypto Fear and Greed Index, a measure of crypto markets’ sentiment, has dropped from 25 to 21, remaining in the “extreme fear zone.”