Spot Bitcoin exchange-traded funds (ETFs) in the United States faced a significant shift in investor sentiment during February, recording their largest-ever monthly net outflows since their launch. According to data from SoSoValue, the 12 Bitcoin ETFs saw more than $3.5 billion in net outflows, marking the highest level of withdrawals in a single month.
This abrupt change follows a strong performance in January, when Bitcoin ETFs experienced $4.8 billion in inflows. February started on a positive note, with $203.54 million in net inflows during the first week, extending a five-week streak of growth. However, the mood turned negative in the subsequent weeks, with each week seeing outflows exceeding $500 million.
The peak of this downward trend occurred in the final week of February, from February 24–28, when Bitcoin ETFs saw net outflows of $2.61 billion, the largest weekly outflows since the funds were introduced. February 25, in particular, stood out, with $1.14 billion in outflows, the highest single-day withdrawal recorded for Bitcoin ETFs.
Despite the overall decline, the ETFs saw a brief return to net inflows on February 28, with $94.34 million entering the funds. The majority of these inflows came from ARK 21Shares’ ARKB, which attracted $193.7 million, followed by Fidelity’s FBTC with $176.03 million. However, these gains were somewhat offset by $244.56 million in outflows from BlackRock’s IBIT.
The sharp outflows coincided with a downturn in Bitcoin’s price, which dropped by approximately 28% from its record high, marking the largest monthly decline since June 2022. This slump wiped nearly $1 trillion from the crypto market. Among the ETFs, Fidelity’s FBTC saw the largest outflow, losing over $1.4 billion.
The broader market sentiment was negatively impacted by multiple factors, including former President Donald Trump’s aggressive trade policies, which heightened concerns about economic instability. Additionally, persistent inflation pressures and the largest crypto theft in history, where hackers stole $1.4 billion from Bybit, led to a pullback from riskier assets. Speculative losses in memecoins further worsened the situation.
Despite the bearish trend throughout February, Bitcoin saw a reversal in its fortunes following Trump’s announcement of the creation of a U.S. Strategic Crypto Reserve. The reserve will include a basket of digital assets, such as Bitcoin and Ethereum, signaling increased governmental engagement with the cryptocurrency sector.
As of the latest updates, Bitcoin surged by 8.1% in the past 24 hours, trading at $92,980 after dipping below $80,000 earlier in the week. Ethereum also experienced a 9.5% gain, showing signs of recovery after being one of the hardest-hit cryptocurrencies.
Federico Brokate, head of U.S. business at 21Shares, commented on the potential implications of the U.S. Crypto Strategic Reserve. He described it as a pivotal moment for digital assets, reflecting the government’s growing involvement in the crypto industry. Brokate emphasized that the inclusion of multiple blockchain protocols highlights the diverse uses of blockchain, positioning the U.S. to lead in the next phase of adoption and innovation within the crypto space.
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