Bitcoin ETFs Experience Largest Daily Outflow of $1.01 Billion
On February 25, US spot Bitcoin exchange-traded funds (ETFs) experienced record net outflows of $1.01 billion, with 10 out of 12 funds reporting withdrawals exceeding new investments. Key points include:
- Fidelity's FBTC had the largest loss at $344.65 million.
- BlackRock's IBIT followed with $164.3 million in outflows.
- Valkyrie's BRRR lost around $100 million.
- Bitwise’s BITB and Grayscale’s Mini Bitcoin Trust saw outflows of $88.3 million and $85 million, respectively.
The previous record for outflows was $671.9 million on December 19.
Reasons for Withdrawals
Industry expert Peter Chung attributes these outflows to institutional investors unwinding basis trades. The narrowing yield discrepancies, from about 10% to 5%, may have prompted hedge funds to liquidate positions, triggering ETF withdrawals. The annualized basis for Bitcoin CME has declined to 4%, the lowest since ETFs launched in January 2024.
Market Context
The outflows coincided with Bitcoin's price dropping below $90,000, reaching as low as $88,000. Contributing factors include:
- President Trump's announcement of a 25% tariff on imports from Canada and Mexico heightened inflation concerns.
- A major hack on Bybit exchange resulted in over $1.5 billion in Ether losses, impacting investor confidence.
As of publication, Bitcoin traded at $88,821, down 0.32% in the past 24 hours.