Bitcoin has experienced a significant downturn in recent weeks, leading to record outflows from bitcoin ETFs. Investors pulled $2.7 billion from these funds between Monday and Thursday.
The outflows highlight a shift in investor sentiment. Market volatility, regulatory concerns, and profit-taking are all contributing factors. The downturn comes amid broader fluctuations in the cryptocurrency market over the past few months.
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Read more šš¼ https://t.co/UYFF6sLc99 pic.twitter.com/OJQdgEVCAH
— Binance (@binance) March 4, 2025
Despite the outflows, some experts believe the long-term outlook for bitcoin ETFs remains positive. They point to the cryptocurrency market’s inherent volatility. Long-term investors continue to hold onto their assets, banking on future growth.
Bitcoin ETFs received approval to launch in 2024. They were initially met with strong demand from everyday investors and major Wall Street institutions. These products benefitted from a surge in bitcoin prices for much of 2024 and early 2025.
#Crypto markets in February 2025 were a study in contrast, with falling valuations but mostly positive fundamental news. Despite the short-term setback, improving fundamentals should create a strong foundation for technological development and user adoption over time.
Read theā¦ pic.twitter.com/qGX2ObcQiK
— Grayscale (@Grayscale) March 4, 2025
Bitcoin’s price briefly dipped to $78,411 early Friday. This marked a 28% correction from its all-time high above $109,000 in January.
It has been down 13% over the past five days and is on pace for its worst month since June 2022. Industry watchers aren’t pinning the sell-off on any single culprit. They point to a combination of negative forces, from broader macroeconomic uncertainty to the recent hack of a crypto derivatives exchange.
It is incredible to see bitcoin swinging up or down in daily $10,000 increments.
Bitcoin investors love the volatility, so volatility is what they will get.
— Anthony Pompliano šŖ (@APompliano) March 4, 2025
Bitcoin ETFs experience a significant downturn
Some signs are that the outflows from bitcoin ETFs are starting to slow. They were $276 million on Thursday, compared with more than $1 billion on Tuesday. Despite the outflows, the ETFs have attracted more than $30 billion in new money over the last year.
These stats will never cease to amaze meā¦
Tether was used in *4 out of 5* crypto transactions last yr.
Tetherās holding company earned *$13bil* in 2024, double that of BlackRock.
via @AABerwick pic.twitter.com/QrupLcZpJL
— Nate Geraci (@NateGeraci) March 5, 2025
Major players in finance, including sovereign wealth funds and hedge funds, held bitcoin ETFs as of December. According to some analysts, Bitcoin’s current slump could continue into March. They say the cryptocurrency may fall to the mid-$70,000 before finding a bottom.
However, others believe the current downturn presents a buying opportunity for investors willing to take on the associated risks.
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