Investor outflows hit $3.8 billion in three weeks amid Bybit hack, Fed uncertainty and profit-taking after 19 weeks of inflows.
Updated Mar 4, 2025 8:34 AM UTC Published Mar 3, 2025 5:18 PM UTC
What to consider:
- Last week, outflows from crypto ETPs totaled a record $2.9 billion, continuing a three-week trend that reached $3.8 billion.
- The leading decliner was BlackRock's iShares Bitcoin Trust (IBIT), which saw a record withdrawal of $1.3 billion.
- Bitcoin investment products lost $2.6 billion, while Sui (SUI) and XRP (XRP) were among the few assets that saw inflows.
A CoinShares report released Monday found that cryptocurrency exchange-traded products (ETPs) saw their biggest weekly selloff ever, with investors pulling about $2.9 billion out of the funds.
The massive outflow of funds indicates a significant change in sentiment after a long period of stable investments in digital assets.
The latest wave of withdrawals continues a three-week streak of outflows that now total $3.8 billion. CoinShares analyst James Butterfill noted several factors that likely contributed to the selloff, including growing investor concern following the recent $1.5 billion hack of crypto exchange Bybit and the Federal Reserve's increasingly hardline stance on monetary policy.
Before this downturn, crypto investment products had seen inflows for 19 consecutive weeks, indicating that some investors were taking profits amid growing market uncertainty.
Bitcoin (BTC), the leading cryptocurrency by market cap, has borne the brunt of the outflows, losing $2.6 billion over the past week. At the same time, funds betting against Bitcoin, known as short Bitcoin ETPs, have seen only a modest $2.3 million inflow, suggesting that bearish sentiment has not yet fully taken hold.
While most assets struggled, some showed growth: Sui (SUI) was the top gainer with $15.5 million in inflows, followed by XRP (XRP), which also attracted new investment.
Spot Bitcoin ETFs have had one of their toughest weeks yet, with investors pulling significant amounts of money out of these funds. According to CoinShares, the largest of its kind, BlackRock’s iShares Bitcoin Trust (IBIT), saw a staggering $1.3 billion in outflows, marking the highest weekly withdrawal since its inception.
Similarly, open interest in CME Bitcoin futures has fallen sharply over the past two weeks, falling from 170,000 BTC to 140,000 BTC, signaling a potential change in institutional positioning. At the same time, three-month futures on an annual basis are yielding 7%, slightly higher than the 4% yield offered by short-term U.S. Treasuries, making trading less attractive to investors.
“This tells me that hedge funds are starting to unwind their underlying trading position, which is a net neutral position,” said James Van Straten, an analyst at CoinDesk. “With the spread between futures yields and risk-free yields narrowing, traders may be shifting capital out of bitcoin derivatives and into safer, more liquid assets.”
Disclaimer: Portions of this article were generated by AI tools and reviewed by our editorial team to ensure accuracy and adhere to our standards. For more information, see CoinDesk's full AI policy.
