New investors pumped up bitcoin ETFs. Now some are exiting.
Investors who piled billions into new bitcoin ETFs over the last year are pulling some of that money back out as the world’s largest cryptocurrency experiences its worst correction since a 2022 meltdown.
Between Monday and Thursday, ETFs holding bitcoin (BTC-USD) experienced $2.7 billion in net outflows, according to a preliminary estimate from JPMorgan Chase (JPM). Estimates from Bloomberg as of Thursday put this week’s outflows even higher.
These products that received approval to launch in 2024 were initially met with hungry demand from both everyday investors and major Wall Street institutions since they offered exposure to the largest cryptocurrency without having to own it — allowing these investors to trade it like they would a stock.
These products also benefitted from a surge in the price of bitcoin for much of 2024 and early 2025 amid optimism about a more favorable approach to the crypto industry from a new presidential administration in Washington, D.C.
Now some of that optimism is in question. Bitcoin’s price briefly dipped to $78,411 early Friday, marking a 28% correction from its all time high above $109,000 hours before Trump’s inauguration in January. It is down 13% over the past five days.
Bitcoin hasn’t seen such a sizable weekly correction since November 2022, in the aftermath of the fall of crypto exchange FTX. And it is on pace to have its worst month since June 2022, when the collapse of stablecoin project Terra caused a major unwind of leverage across the crypto world.
Bitcoin “is a volatile asset,” longtime crypto influencer Anthony Pompliano, CEO of Professional Capital Management, told Yahoo Finance on Friday. Investors are “buying volatility. If you want bitcoin to go up, you got to be okay with it going down sometimes.”
But “I don’t really think that people should be that worried,” he added.
Industry watchers aren’t pinning the sell-off on any single culprit. Instead, they are pointing to a mishmash of negative forces spurring poor vibes, from broader macro uncertainty spurred by talk of widespread Trump administration tariffs to the recent hack of crypto derivatives exchange Bybit.
Trump provided a major boost to crypto asset prices last year after making major promises to the crypto world and getting elected, but after that “unbounded bullish” run up the market is in “hangover” mode, Alex Thorn, head of research for crypto firm Galaxy Digital, told Yahoo Finance.
“I think it’s reasonable for the market to take a breather just in general,” Thorn said.
There are some signs that the outflows from the bitcoin ETFs are starting to slow. They were $276 million on Thursday, according to preliminary data tracked by JPMorgan, compared with more than $1 billion on Tuesday, and $764 billion on Wednesday.
The $1 billion mark on Tuesday was the single biggest one day retreat from these products since they launched in early January 2024.
“I would argue that bitcoin hasn’t crashed, it’s on sale and we know smart money buys the blood even if it’s their own and that’s what [is] happening right now,” host of The Wolf Of All Streets podcast Scott Melker told Yahoo Finance.
Even with the outflows, however, the ETFs have still attracted more than $30 billion in new money over the last year.
Among the major players in finance that held bitcoin ETFs as of December, according to SEC disclosures, were Abu Dhabi’s sovereign wealth fund and the family office of Paul Tudor Jones as well as hedge fund Millennium Management.
And more bitcoin is currently held by these ETFs than any other single source, including public and private companies and governments, according to bitcoin holder tracking site BitcoinTreasuries.
There could still be more volatility ahead for investors. Bitcoin’s current slump could continue into March, Fundstrat analyst Mark Newton said in a video presentation earlier this week.
Based on price data from past years, Newton said bitcoin may be in for another bad few weeks before the rout ends, giving “above average” odds that its price falls “down to the mid $70,000s.”
“My maximum target is going to be right around, $60,000, that really lines up with the potential for a bottom in bitcoin right around the last week of March,” he added.
David Hollerith is a senior reporter for Yahoo Finance covering banking, crypto, and other areas in finance.
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