Bitcoin ETFs Experience Significant Outflows Amid Market Volatility

Bitcoin exchange-traded funds (ETFs) have reached a new low for the year in assets under management (AUM) following substantial outflows. According to Cointelegraph, assets in spot Bitcoin (BTC) ETFs fell below $100 billion on Tuesday after experiencing $272 million in outflows, as reported by SoSoValue. This marks the first time since April 2025 that spot Bitcoin ETF AUM has dropped below the $100 billion mark, following a peak of approximately $168 billion in October. The decline occurred amid a broader sell-off in the cryptocurrency market, with Bitcoin's value falling below $74,000 on Tuesday. The global cryptocurrency market capitalization decreased from $3.11 trillion to $2.64 trillion over the past week, according to CoinGecko. Despite the recent outflows, spot Bitcoin ETFs had seen a brief rebound on Monday, attracting $562 million in net inflows. However, the losses resumed on Tuesday, bringing the year-to-date outflows to nearly $1.3 billion, reflecting the ongoing market volatility. In contrast, ETFs tracking altcoins such as Ether (ETH), XRP (XRP), and Solana (SOL) recorded modest inflows of $14 million, $19.6 million, and $1.2 million, respectively. The ongoing sell-off in Bitcoin ETFs coincides with BTC trading below the ETF creation cost basis of $84,000, indicating that new ETF shares are being issued at a loss, thereby exerting pressure on fund flows. Market analysts suggest that the slump is unlikely to lead to further mass sell-offs in ETFs. ETF analyst Nate Geraci expressed on X that the majority of assets in spot BTC ETFs are expected to remain stable. Thomas Restout, CEO of institutional liquidity provider B2C2, shared a similar view, emphasizing the resilience of institutional ETF investors. He also hinted at a potential shift towards onchain trading. Restout noted in a Rulematch Spot On podcast that institutions buying ETFs are more resilient and tend to hold their positions longer. He anticipates that the next phase of transformation will involve institutions trading cryptocurrencies directly, rather than relying solely on securitized ETFs.