Bitcoin ETFs See Record $935M Outflows Amid Market Sell-Off

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February 26, 2025 by Bena Ilyas

U.S. spot Bitcoin ETFs recorded $935 million in outflows on Tuesday, pushing weekly losses to $1.5 billion amid a broader market sell-off.
Fidelity’s FBTC led redemptions with $344 million in outflows, followed by BlackRock’s IBIT at $162 million and other major funds experiencing significant withdrawals.
The sell-off triggered $1.6 billion in leveraged liquidations, with hedge funds facing pressure due to Bitcoin ETF-based basis trading strategies.

On Tuesday, the U.S. spot Bitcoin ETFs faced a record $935 million in net outflows, extending their total losses this week to approximately $1.5 billion. The sudden withdrawal comes during a broader crypto market downturn, fueled by renewed macroeconomic concerns following former President Donald Trump’s tariff threats on Mexican and Canadian imports.

According to Farside Investors and Trader T data, multiple Bitcoin ETFs witnessed significant redemptions, with Fidelity’s FBTC leading the sell-off at $344 million in outflows. BlackRock’s IBIT was followed by nearly $162 million in redemptions, further adding to the market turbulence.

Other major funds also experienced significant withdrawals. Bitwise’s BITB and Grayscale’s BTC shed over $85 million, while Franklin Templeton’s EZBC recorded $74 million in outflows. Grayscale’s GBTC and Invesco’s BTCO followed closely, losing $66 million and $62 million, respectively. Valkyrie, WisdomTree, and VanEck also reported notable net outflows.

This latest ETF exodus surpassed the previous record of $672 million in daily outflows set on December 19, 2024. Additionally, it marks the sixth consecutive day of ETF redemptions, with investors pulling $539 million from Bitcoin ETFs on Monday alone

The massive ETF outflows coincided with Bitcoin’s sharp price decline, which saw the leading cryptocurrency drop to $86,000, its lowest level since November. According to TradingView, BTC has stabilized at around $88,900 but has remained down 7% over the past week.

The broader crypto market has also suffered, with the total market cap plunging 3.5% in the last 24 hours. Altcoins have been particularly hard-hit, struggling to recover from steep losses amid the ongoing sell-off.

Bitcoin Crashes $1.6B Liquidated

The rapid decline in BTC and the broader crypto market has resulted in $1.6 billion in leveraged liquidations over the past 24 hours, according to Coinglass. The selling pressure has raised concerns about further losses, with former BitMEX CEO Arthur Hayes warning regarding hedge funds involved in basis trading using Bitcoin ETFs.

“Many $IBIT holders are hedge funds that went long ETF short CME futures to earn a yield greater than short-term U.S. treasuries,” Hayes explained. “If Bitcoin’s price continues to drop, these funds will be forced to sell $IBIT and buy back CME futures,” potentially intensifying the downward pressure on Bitcoin.

The ongoing crypto market turmoil has been largely driven by global macroeconomic concerns, particularly Trump’s decision to reinstate tariffs on Mexican and Canadian imports. The move has reignited inflation fears, causing investors to shift away from risk assets like Bitcoin and cryptocurrencies.

Reflecting the growing market uncertainty, the Crypto Fear and Greed Index has fallen from 25 to 21, pushing sentiment deeper into the “extreme fear” zone.

With Bitcoin struggling to hold key price levels and ETF outflows accelerating, market participants remain on edge, watching closely for the next major move in the cryptocurrency sector.

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