Bitcoin Price Crashes: The $1.1 Billion ETF Exodus Explained
Bitcoin Price Crashes – Investors in BlackRock iShares Bitcoin Trust pulled a record $420 million from the fund in a single day as Bitcoin dropped to its yearly lows. On February 26, BlackRock’s spot Bitcoin ETF (IBIT) saw its largest outflow to date, shedding 5,000 BTC. This outflow surpassed the previous record of $332 million lost on January 2, signaling significant investor concerns amid ongoing market turbulence.
Massive Outflows Across Bitcoin ETFs and Broader Crypto Market Decline
The outflow from BlackRock came on the heels of a record day of outflows on February 24, when more than $1.1 billion exited from various Bitcoin-related products. This marked the culmination of a seven-day outflow streak, totaling nearly $3 billion across the board. According to preliminary figures from CoinGlass, the day’s total outflow reached $756 million. However, ETF Store President Nate Geraci suggests this could be a “shorter-term blip” and not a long-term trend.
The Fidelity Wise Origin Bitcoin Fund (FBTC) also experienced a similar outflow pattern, with $145.7 million exiting the fund on February 26. Other major players like Bitwise, Ark 21Shares, Invesco, Franklin, WisdomTree, and Grayscale saw outflows ranging between $10 million and $60 million.
Crypto Market Faces Continued Losses
The broader crypto market has been under pressure, with the total market capitalization dropping another 5.6% on the day to $2.9 trillion. Bitcoin, in particular, saw its price plummet to a low of $82,455 on February 26. This market correction has now reached 25%, with over $1 trillion in value exiting since Bitcoin’s all-time high on December 17.
Analysts Advise Caution Amid Market Volatility
Despite the sharp decline, CryptoQuant CEO Ki Young Ju warned against “panic selling,” explaining that a 30% correction is not uncommon during a Bitcoin bull cycle, citing a 53% drop in 2021 that Bitcoin still managed to recover from. Arthur Hayes, co-founder of BitMEX, and Markus Thielen, head of research at 10x Research, both pointed out that the majority of Bitcoin ETF investors are hedge funds seeking arbitrage opportunities, and they are unwinding their positions as these opportunities diminish.
Arthur Hayes predicted on February 24 that Bitcoin could drop to $70,000 if outflows from spot Bitcoin ETFs continue. Traders are also eyeing the $74,000 price zone as US President Donald Trump threatens additional trade tariffs. The market remains uncertain as these complex dynamics unfold.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Cryptocurrencies and stocks, particularly in micro-cap companies, are subject to significant volatility and risk. Please conduct thorough research before making any investment decisions.
Leave a comment