February was challenging for U.S. Bitcoin ETFs, marking record outflows due to market volatility.
Current Situation of Bitcoin ETFs
On February 25, U.S. Bitcoin ETFs recorded their largest-ever daily outflow of approximately $938 million. In total, $937.9 million exited 11 funds over six consecutive days. The Fidelity Wise Origin Bitcoin Fund (FBTC) led with an outflow of $344.7 million, followed by BlackRock's iShares Bitcoin Trust (IBIT) losing $164.4 million. February saw a total outflow of over $2.4 billion, despite only four days of net inflows.
Reasons and Expert Opinions
ETF Store President Nate Geraci commented on ongoing skepticism in the traditional finance sector towards Bitcoin, despite its long-term viability. BitMEX co-founder Arthur Hayes pointed out that many Bitcoin ETF investors are hedge funds seeking arbitrage yields, rather than long-term holdings. Hayes warned that Bitcoin could drop to $70,000 if outflows persist.
Potential Consequences and Forecasts
Research indicates that over half of Bitcoin ETF investors are engaged in arbitrage. Markus Thielen from 10x Research noted that this is a market-neutral activity that minimizes market impact. However, continued outflows could affect Bitcoin prices and arbitrage strategies.
The record outflows from U.S. Bitcoin ETFs reflect market volatility and strategic shifts by institutional investors amidst current market conditions.
