Spot Bitcoin exchange-traded funds (ETFs) in the United States have experienced the highest monthly net outflows since their inception, totaling over $3.5 billion in February.
Data reveals that the 12 spot Bitcoin ETFs faced unprecedented net outflows during the month, a stark contrast to January, when they recorded approximately $4.8 billion in inflows. This shift in investor sentiment has raised eyebrows within the financial community.
February initially began positively for Bitcoin ETFs, garnering $203.54 million in net inflows during the first week, marking a continuation of a five-week inflow trend. However, the momentum reversed dramatically, with subsequent weeks witnessing outflows surpassing $500 million each.
The downturn culminated in the week of February 24–28, which saw net outflows amounting to $2.61 billion, the largest weekly outflows since the ETFs’ launch. Notably, February 25 recorded $1.14 billion in net outflows—an all-time high for single-day outflows for Bitcoin ETFs.
In a slight recovery, the Bitcoin ETFs returned to net inflows on February 28, attracting $94.34 million. Most of these inflows were driven by ARK 21Shares’ ARKB, which saw $193.7 million influx, followed by Fidelity’s FBTC, attracting $176.03 million. However, these gains were partially countered by outflows from BlackRock’s IBIT, totaling $244.56 million.
The substantial net outflows coincide with Bitcoin’s fall of approximately 28% from its all-time high as of March 2, marking its largest monthly decline since June 2022 and erasing nearly $1 trillion from the overall crypto market. Fidelity’s FBTC was notably affected, losing over $1.4 billion in outflows.
Investor confidence has been shaken by economic concerns stemming from aggressive trade policies, alongside persistent inflation which has driven many to retreat from riskier assets. This situation worsened following a historic theft of nearly $1.4 billion from Bybit, compounding the losses traders faced in speculative memecoins.
Despite a challenging February, Bitcoin saw a rebound with an 8.1% rise in the 24 hours leading up to recent reports, trading at $92,980 after plummeting below $80,000 earlier in the week. Ethereum (ETH) also experienced a resurgence, gaining 9.5%.
Industry experts recognize the significance of these developments, particularly following the announcement of a U.S. Strategic Crypto Reserve, which may include Bitcoin and Ethereum. This initiative signals a crucial turning point for digital assets and underscores the government’s evolving engagement with the cryptocurrency market.
The inclusion of multiple blockchain protocols is seen as a testament to the diverse utility of blockchain technologies. This strategic move may position the U.S. to spearhead the next wave of crypto adoption and innovation.
