Key Points
- Spot Bitcoin ETFs recorded negative flows for the fourth consecutive week due to macroeconomic factors.
- Nine spot Ethereum funds also reported two consecutive weeks of negative flows.
Spot Bitcoin Exchange-Traded Funds (ETFs) have seen a continued decrease in weekly flows for the fourth week in a row. Macroeconomic factors are reportedly influencing investor sentiment.
Data from SoSoValue reveals that from March 3-5, 12 spot Bitcoin ETFs experienced another week of outflows, with nearly $800 million leaving the funds. This follows a week of record outflows that saw more than $2.61 billion in redemptions, bringing the total net outflows over the past four weeks to over $4.5 billion.
Details of the Outflows
Throughout the past week, Bitcoin ETFs recorded net negative flows, with the largest outflow of $409 million occurring on Friday. On the same day, ARK and 21Shares’ ARKB led the outflows with $160.03 million, followed by Fidelity’s FBTC at $154.89 million. Other significant ETF issuers, including BlackRock’s IBIT, Grayscale’s GBTC, and Bitwise’s BITB, also saw outflows. VanEck’s HODL was the only fund to experience a modest inflow.
In addition to Bitcoin, nine spot Ethereum funds reported two consecutive weeks of negative flows, with $455 million exiting the funds. This reflects a broader bearish sentiment in the cryptocurrency market.
Factors Contributing to the Downward Trend
Despite anticipation that the White House Crypto Summit could boost the market, Bitcoin ETFs continued their downward trend. This decline is attributed to macroeconomic concerns, including trade tariffs and overall economic uncertainty, which seem to be affecting investor confidence in digital assets.
Experts suggest that strategic market shifts are also contributing to the sell-off. A common theory is that hedge funds have been taking advantage of low-risk arbitrage trades between Bitcoin spot ETFs and CME futures. As these trades unwind, liquidity is reducing, leading to increased selling pressure and exacerbating ETF outflows.
Another factor influencing Bitcoin’s recent price swings is the announcement of the Strategic Bitcoin Reserve and the U.S. Digital Asset Stockpile. Despite expectations that the Crypto Summit would be a bullish event, Bitcoin’s price instead dropped following the signing of the executive order.
Kadan Stadelmann, CTO of Komodo, explained that Bitcoin ETFs are experiencing major outflows despite the creation of the Strategic Bitcoin Reserve due to a classic case of “buy the rumor, sell the news.” In these situations, assets typically rise in anticipation of an event but decline once it materializes.
Stadelmann pointed out that speculation about the Strategic Bitcoin Reserve began when it was first mentioned in July 2024. By the time the official announcement was made during the Crypto Summit, the market had already priced it in, leading to a sell-off.
He added that during these situations, “people who are less informed, connected, and monied often buy the news and lose money.” The summit occurred during a challenging time for the market, with concerns over trade tariffs exacerbating existing worries about inflation, a slowing real estate market, weak consumer spending, and declining savings.