Bitcoin (BTC) and Crypto Exchange-Traded Products (ETPs) Have Seen Outflows

Digital asset exchange-traded products (ETPs) and Bitcoin-specific funds have seen outflows lately, with Bitcoin and other cryptocurrencies feeling the impact of market instability.

Crypto asset exchange-traded products (ETPs) and Bitcoin-specific funds encountered outflows recently, as Bitcoin and other cryptocurrencies felt the impact of market instability, leading to further declines.

According to data from digital asset management firm CoinShares, the outflows in the past week reached $2.6 billion, the largest on record for Bitcoin and digital asset ETPs. However, James Butterfill, head of research at CoinShares, observed that the selling appears to be cooling as the basis trade unwinds.

“Most of the US$2.6bn net outflows this week so far for Bitcoin and Digital Assets ETPs/ETFs (an all time record) seems to be part of the basis trade unwinding and the selling frenzy is cooling off,” Butterfill said in a statement on Friday.

From February 3 to 24, the global ETP market for digital assets, including Bitcoin, saw considerable fluctuations. The market experienced a surge, with global ETPs showing inflows exceeding $1 billion. This peak was followed by a decline in the following weeks, including notable dips on February 10 and 17.

While the general market saw more movements, the US Spot Bitcoin ETFs maintained a stable performance during this period. However, the most notable event occurred on February 24, when Bitcoin ETFs saw an outflow, showing a shift in investor sentiment despite growing economic uncertainty.

U.S. Spot Bitcoin ETFs saw their largest-ever outflows on February 24, with more than $1 billion in investments withdrawn in a 24-hour period.

This unusual selloff marks the worst day for Bitcoin ETFs since their introduction last year, surpassing the previous record set in December when outflows reached $672 million.

The large exit follows six days of losses that saw the funds drop more than $2 billion.

These large outflows follow concerns over US economic policies, such as trade tariffs, inflation, and the recent presidential inauguration, which have put pressure on the crypto market and led to the ongoing decline in digital asset prices.

Among the ETPs, those tracking XRP saw inflows of $38 million, contrasting with Bitcoin’s trend. The XRP ETPs saw continued optimism from investors, who believe the US Securities and Exchange Commission (SEC) may soon drop its lawsuit against Ripple (XRP). Since November 2024, XRP ETPs have seen $819 million in inflows.

Bitcoin’s price decline has mirrored the broader market’s challenges. Since early February, Bitcoin dropped from over $100,000 to below $85,000 due to US trade policies, the high-profile hack of crypto exchange ByBit, and various memecoin scandals.