BlackRock’s iShares Bitcoin Trust (IBIT) experienced a significant single-day outflow of $420 million on February 26, marking its largest withdrawal since launching in 2024. This comes as part of a broader trend where Bitcoin exchange-traded funds (ETFs) have been witnessing continued capital flight, extending a seven-day losing streak. Investors have been pulling funds as Bitcoin’s price hit yearly lows, amplifying concerns over market stability.
The outflows from BlackRock’s ETF contributed to a total of $756 million leaving Bitcoin ETFs on the same day, with Fidelity’s Wise Origin Bitcoin Fund (FBTC) also experiencing a seven-day decline, losing an additional $145.7 million. Other funds, including those from Bitwise, Ark 21Shares, Invesco, Franklin, WisdomTree, and Grayscale, saw outflows ranging from $10 million to $60 million. The continuous withdrawals align with broader market corrections, as Bitcoin’s total market capitalization shrank by 5.6% in a single day.
Despite these losses, some industry experts view this trend as a short-term correction rather than a long-term bearish signal. CryptoQuant CEO Ki Young Ju reassured investors, noting that similar pullbacks have occurred in previous bull cycles, with Bitcoin historically recovering to new highs after such downturns. Analysts suggest that many ETF investors are hedge funds leveraging arbitrage strategies rather than long-term holders, and they may be unwinding their positions due to shifting market dynamics.
Arthur Hayes, co-founder of BitMEX, and other analysts have predicted further downward pressure on Bitcoin’s price, with some expecting a potential dip to $70,000. Additionally, macroeconomic factors, including U.S. trade policies under the Biden administration, could influence market sentiment. Despite current setbacks, some investors remain confident in Bitcoin’s long-term trajectory.
