As Bitcoin plummets toward $90,000, crypto ETFs are bleeding money at an alarming rate. Over $1 billion has been pulled from crypto ETFs in just a few days, with Monday’s outflow hitting $516.4 million—the second-biggest of the year.
Tuesday was even worse, with a record-breaking $937 million single-day exodus. So much for the ETF hype.
The numbers tell a brutal story. Since peaking in February, these funds have hemorrhaged $1.65 billion. Bitcoin isn’t helping matters, breaking out of its three-month channel and briefly tanking to $86,500—a three-month low. The market capitalization of the entire cryptocurrency sector reflects this downturn as prices continue falling across the board.
Currently trading at $88,488, weekly losses exceed 7.5%. Some experts even predict a potential drop to the $70,000-$75,000 range. Ouch.
Bitcoin’s 7.5% weekly nosedive has experts eyeing an even grimmer scenario—potential drops to $70,000 territory.
What’s driving this financial bloodbath? A perfect storm, really. There’s the broader market sell-off, declining U.S. consumer confidence, and the $1.5 billion Bybit hack that has everyone questioning their crypto security. The Fidelity Wise Origin Bitcoin Fund saw the largest outflow at $412 million.
The CME annualized basis dropping below 5% isn’t exactly reassuring investors either.
The damage extends beyond just Bitcoin. Ether and Sol are experiencing double-digit percentage drops, with $1.3 billion in total crypto liquidations over 24 hours.
Bitcoin alone accounts for $523 million of that carnage. Over 362,000 traders got caught in the crossfire.
Institutional investors aren’t sitting pretty either. Hedge funds are unwinding positions, Strategy (formerly MicroStrategy) saw its stock price tank, and increased Bitcoin exchange inflows suggest more selling pressure ahead.
The market’s getting skittish, and fast.
This situation contrasts sharply with the overall ETF industry momentum that saw Bitcoin ETFs set a precedent for new product innovation in the market.
Looking forward, some optimists predict a recovery by the end of 2025, comparing current conditions to 2017’s market structure with multiple corrections.
The ETF industry still expects continued growth momentum despite the setback.
But for now? February has been brutal, with outflows on 69% of trading days. Total withdrawals from crypto ETPs and ETFs have reached a staggering $1.7 billion this week alone.
Not exactly the smooth ride investors signed up for.
