Bitcoin ETFs Experience Record $1 Billion Outflows on Worst Day Yet

U.S. spot Bitcoin ETFs faced their most significant outflows on Tuesday as Bitcoin dropped below $88,000, triggering the largest single-day capital flight in the history of these investment vehicles. Fidelity’s FBTC was the hardest hit, followed closely by BlackRock’s ETF.

Spot Bitcoin exchange-traded funds (ETFs) in the U.S. endured a sharp sell-off on Tuesday as the cryptocurrency market experienced a steep decline, pushing Bitcoin’s price to its lowest level in three months.

The global cryptocurrency market capitalization dropped nearly 10% to below $3 trillion, with Bitcoin falling to $86,000 for the first time since November. This downturn significantly impacted the 12 Bitcoin ETFs in the U.S. market, which collectively extended their streak to six consecutive sessions of negative flows. Tuesday saw the largest daily net outflow of $1 billion, according to data from SoSoValue.

These outflows far surpassed Monday’s record of $538.9 million and also exceeded the $680 million outflow on December 18, which previously held the record for the largest single-day outflow in history.

Fidelity’s Bitcoin ETF Takes the Hardest Hit

All ETFs in the group ended Tuesday with negative flows. Although data for Ark’s ARKB and 21Shares was unavailable at the time of publication, the remaining ETFs showed significant losses.

Fidelity’s FBTC suffered the most, with a daily net outflow of $344.6 million. This brought the fund’s total outflows over the last six sessions to over $756 million. BlackRock’s IBIT was the second hardest hit, seeing outflows of $164 million, followed by Valkyrie’s BRRR, which recorded $100 million in net withdrawals.

Bitwise’s ETF and Grayscale’s mini ETF reported negative flows of $88 million and $85 million, respectively, while Franklin Templeton’s EZBC products, Grayscale’s GBTC, and Invesco’s BTCO also experienced significant net outflows.

The massive outflows over the last six trading days saw spot Bitcoin ETFs collectively losing more than $2 billion. As a result, accumulated net inflows fell to $38 billion, marking their lowest level since mid-January. Meanwhile, the value of net assets under management declined to $101 billion.

Cryptocurrency Market Recession

The ETF outflows highlighted a broader downturn in the cryptocurrency market. Bitcoin dropped to its lowest point this year, trading below $88,000, while Ether and other major altcoins, including XRP and Solana, experienced even sharper declines.

Macroeconomic concerns, such as uncertainty over U.S. trade policy and speculation about the Federal Reserve’s interest rate decisions, have heightened investor caution. Earlier in the week, former President Donald Trump’s announcement to proceed with tariffs on Mexico and Canada negatively impacted market sentiment.

BTC Markets cryptocurrency analyst Rachael Lucas pointed to multiple factors driving the massive ETF outflows, including macroeconomic uncertainties and institutional portfolio rebalancing. She explained that prolonged interest rate hikes increase the cost of capital and decrease liquidity, prompting investors to become more risk-averse.

“If we see continued outflows, it could erode confidence and lead to greater volatility,” Lucas warned, adding that while this could exert bearish pressure on Bitcoin’s price, it may not necessarily result in a prolonged market recession.

At the time of writing, Bitcoin is trading at approximately $88,300, down nearly 1% over the last 24 hours and 19% below its all-time high of over $109,000 from the previous month.