American Bitcoin ETFs Record Largest Daily Outflow of $938 Million

American spot Bitcoin ETFs recorded their largest daily net outflows as Bitcoin fell below 90,000 dollars. A total of 11 Bitcoin ETFs reported a net outflow of $937.9 million this week, marking the sixth consecutive trading day of outflows, according to CoinGlass data.

The exodus of ETFs followed a broader decline in the cryptocurrency market, where Bitcoin fell by 3.4 percent yesterday, reaching a low of 86,140 dollars. The Fidelity Wise Origin Bitcoin Fund (FBTC) led the daily losses with an outflow of $344.7 million, setting a new record outflow for the ETF. BlackRock’s iShares Bitcoin Trust (IBIT) was second with an outflow of $164.4 million.

The Bitwise Bitcoin ETF (BITB) lost $88.3 million, while Grayscale’s two funds net lost $151.9 million, split between $66.1 million from the Grayscale Bitcoin Trust (GBTC) and $85.8 million from the Bitcoin Mini Trust ETF (BTC). Approximately 2.4 billion dollars has exited from the 11 ETFs so far this month, which has recorded only four days of net inflows.

ETF Store President Nate Geraci stated in a post on X that he is ‘still amazed at how much TradFi hates Bitcoin and crypto.’

Analysts and industry experts such as BitMEX co-founder Arthur Hayes and 10x Research head of research Markus Thielen noted that most investors in Bitcoin ETFs are hedge funds seeking arbitrage returns, rather than long-term Bitcoin investors.

Hayes predicted on February 24 that Bitcoin would fall to 70,000 dollars due to the ongoing outflows from ETFs. Many IBIT holders are hedge funds that bought long positions while shorting CME futures to earn a yield higher than that of short-term U.S. Treasury bonds, he explained. However, when that ‘underlying’ yield falls with the price of Bitcoin, those funds will sell their IBIT positions and buy back CME futures, Hayes said.

Thielen, whose research on February 24 revealed that more than half of the spot Bitcoin ETF investors were funds playing the arbitrage game, stated that the unwinding process is ‘market neutral’ as it involves selling ETFs while simultaneously buying Bitcoin futures, effectively neutralizing any directional impact on the market.