Bitcoin ETFs See Outflows as BTC Drops Below $95K

On February 18, Bitcoin exchange-traded funds (ETFs) shifted to a phase of net outflows as Bitcoin’s price briefly dipped below the $95,000 mark. This was part of a broader downtrend in Bitcoin’s price that has persisted since its all-time high of $109,200 about a month ago. The primary driver of this decline in Bitcoin’s price and the corresponding outflows from Bitcoin ETFs seems to be the decreasing likelihood of a Strategic Bitcoin Reserve (SBR) being established under the Trump administration in the U.S.

Polymarket, a prediction market platform, reported a significant drop in the probability of President Trump launching an SBR in the first 100 days of his presidency, falling from a high of 40% in January to just 11%. This sharp decline in the odds of such a reserve being created has caused some skepticism among investors, leading to a drop in Bitcoin’s price as the market reacts to the news.

As a result, the 12 spot Bitcoin ETFs tracked by SoSoValue experienced a net outflow of $60.63 million on February 18, a stark reversal from the $66.19 million in net inflows that the funds saw the previous trading day. Among the funds with significant outflows, Bitwise’s BITB stood out, seeing $112.65 million exit the fund, followed by Fidelity’s FBTC, which lost $16.42 million.

However, not all Bitcoin ETFs were affected equally. BlackRock’s IBIT, for instance, managed to attract $68.44 million in inflows, somewhat offsetting the outflows from other funds. The remaining nine Bitcoin ETFs saw no substantial flows in either direction on that day. This mixed result across Bitcoin ETFs suggests that despite the outflows, investor interest in the sector remains strong, with trading activity rising significantly.

Bitcoin’s price and ETF activity aren’t the only areas seeing volatility. Ethereum also had a mixed performance, though Ethereum ETFs continued to experience positive inflows. On February 18, the nine spot Ethereum ETFs saw a modest $4.6 million in inflows, entirely attributed to Fidelity’s FETH, which recorded inflows for the third consecutive day. This indicates that while Bitcoin’s price may be facing pressure, Ethereum is maintaining some investor confidence, at least in terms of ETF trading.

The decline in the likelihood of a U.S. Strategic Bitcoin Reserve is particularly significant for market sentiment, as many had previously speculated that such a move would solidify Bitcoin’s position as a more established and recognized asset within institutional circles. The SBR idea had been seen as a potential catalyst for Bitcoin’s further rise, with predictions that it could encourage other nations to follow suit in acquiring and holding Bitcoin as part of their reserves.

Despite the outflows and the downturn in Bitcoin’s price, the trading volume for Bitcoin ETFs has remained relatively high, reaching $2.83 billion on February 18—an increase from $2.2 billion on the previous day. This suggests that while investors might be pulling back in some areas, there is still significant activity in Bitcoin markets, with traders likely waiting to see how Bitcoin’s price develops further.

At the time of writing, Bitcoin was trading at $95,287, down 0.4% over the past 24 hours. Ethereum, on the other hand, was trading relatively flat at $2,688 per coin, signaling some stabilization for the cryptocurrency despite the overall market challenges.