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Major funds including Grayscale, BlackRock, and Fidelity experience significant withdrawals as Bitcoin falls below $97,000, reflecting institutional risk-off sentiment.

U.S. spot Bitcoin exchange-traded funds (ETFs) experienced significant capital withdrawals on Thursday, with net outflows totaling $869.9 million. The figure represents the second-largest single-day exit since the launch of these ETFs, highlighting the heightened volatility in the cryptocurrency markets and growing caution among institutional investors.

The outflows coincided with a broader market sell-off that saw Bitcoin prices tumble 6.4% to $96,956. Other major cryptocurrencies experienced similar declines, with Ethereum, Solana, and other high-profile altcoins also registering losses. Market analysts indicate that the sell-off reflects both technical pressures and broader macroeconomic uncertainty, prompting investors to de-risk portfolios and reassess exposure to volatile digital assets.

ETF-Specific Outflows

Among the funds, Grayscale's Bitcoin Mini Trust led the exodus, with $318.2 million withdrawn, according to SoSoValue data. BlackRock's iShares Bitcoin Trust (IBIT) posted $256.6 million in net outflows, while Fidelity’s FBTC saw $119.9 million exit the fund. Other funds including Grayscale’s flagship GBTC, as well as ETFs from Ark, 21Shares, Bitwise, VanEck, Invesco, Valkyrie, and Franklin Templeton, also recorded net outflows.

Thursday’s withdrawals mark a notable event in the short history of U.S. spot Bitcoin ETFs. The largest daily outflow occurred on February 25, 2025, when funds collectively experienced $1.14 billion in single-day exits. Analysts note that while the size of these outflows is significant, they do not necessarily indicate a structural collapse in investor confidence.

Institutional Risk-Off Sentiment

Vincent Liu, Chief Investment Officer at Kronos Research, described the outflows as a "risk-off reset," reflecting institutions pulling back amid heightened macroeconomic noise. He emphasized that while short-term momentum is affected, the broader structural demand for Bitcoin remains intact. According to Liu, these periods of heightened outflows often align with oversold conditions that could ultimately present buying opportunities for long-term investors.

Min Jung, a research associate at Presto Research, echoed this perspective, noting that the pattern indicates broad de-risking across markets. Investors appear to be rotating capital from higher-beta assets into safer instruments as uncertainty around Federal Reserve policy and deteriorating macro sentiment influences decision-making.

Justin d’Anethan, Head of Research at Arctic Digital, highlighted that current Bitcoin price levels may act as potential support zones. He suggested that if Bitcoin reaches the lower $90,000s, sidelined investors could find opportunities to enter the market. “Institutional withdrawals reflect caution, but also highlight key technical levels where buying interest can re-emerge,” d’Anethan stated.

Macro Factors at Play

The market environment is influenced heavily by U.S. monetary policy expectations. Rate-cut probabilities for December have shifted, with the CME Group's FedWatch tool placing the odds at 52.1%, reflecting a reset in investor expectations. Rising Treasury yields, inflation uncertainty, and global economic concerns continue to exert downward pressure on risk assets, including Bitcoin and other cryptocurrencies.

SC: CME

Additionally, geopolitical uncertainties and banking sector volatility have prompted institutions to adopt defensive positioning. While retail investors are reacting to short-term price declines, institutional players often use these periods to rebalance portfolios, either reducing exposure or selectively deploying capital at attractive valuations.

Historical Context for Bitcoin ETFs

Bitcoin ETFs have attracted substantial institutional interest since their introduction in 2024. Spot-based products allow investors to gain exposure to Bitcoin without holding the asset directly, mitigating custody and security concerns. Despite volatility, inflows into these ETFs have consistently signaled growing mainstream adoption. As of late 2025, total assets under management in U.S. Bitcoin ETFs exceed $15 billion, reflecting both retail and institutional demand.

The exodus observed on Thursday demonstrates that even widely adopted ETFs are not immune to market swings. Analysts emphasize the importance of viewing these outflows in context: temporary retracements often follow periods of rapid gains and can coincide with macroeconomic developments, rather than a fundamental shift in Bitcoin's long-term adoption narrative.

Implications for Investors

For market participants, the combination of ETF outflows and price declines presents both challenges and opportunities. Traders may experience heightened volatility, while long-term holders could interpret these conditions as attractive entry points. Financial advisors note that understanding the interplay between ETFs, spot Bitcoin markets, and broader economic conditions is crucial for making informed investment decisions.

Moreover, the ongoing maturation of cryptocurrency infrastructure, including custody solutions, regulated trading platforms, and institutional-grade risk management tools, continues to support confidence in digital assets. While short-term outflows generate headlines, structural growth in the space remains strong, and ETFs remain a vital bridge between traditional finance and digital assets.

Looking Ahead

Investors will closely monitor how ETF flows evolve over the coming weeks, particularly in relation to Bitcoin’s technical support levels and macroeconomic developments. Analysts expect periods of consolidation followed by renewed inflows once markets stabilize, reinforcing the long-term thesis that Bitcoin and associated ETFs serve as critical instruments for diversification and digital asset exposure.

Regulators are also expected to continue shaping the landscape. Enhanced disclosure requirements and risk management protocols for ETFs aim to provide transparency for institutional and retail investors alike. As regulatory clarity improves, ETFs may attract additional inflows, balancing temporary outflows during volatile periods.

Conclusion

Thursday’s $869.9 million outflow from U.S. Bitcoin ETFs highlights the market’s sensitivity to macroeconomic developments and institutional risk sentiment. While the withdrawals are substantial, they occur against the backdrop of long-term structural demand and increasing adoption of regulated digital asset products. Investors should view these events as part of the ongoing evolution of cryptocurrency markets, where periods of volatility often create opportunities for disciplined, strategic participation.

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Writer @Erlin
Erlin is an experienced crypto writer who loves to explore the intersection of blockchain technology and financial markets. She regularly provides insights into the latest trends and innovations in the digital currency space.
 
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