Bitcoin ETFs Post Three Consecutive Days of Outflows, Totaling Nearly $500M

U.S. spot Bitcoin exchange-traded funds (ETFs) have recorded three consecutive days of outflows, totaling nearly $500 million, as macroeconomic uncertainty dampens investor sentiment.

On Wednesday alone, outflows reached $251 million with Fidelity's Wise Origin Bitcoin Fund (FBTC) accounting for $102 million and BlackRock's iShares Trust (IBIT) seeing a $22.1 million reduction, according to SoSoValue data. Monday and Tuesday recorded outflows of $186 million and $56 million, respectively.

The last time Bitcoin ETFs recorded outflows for three or more consecutive days was on Jan. 8, nearly two weeks before President Donald Trump's second inauguration on Jan. 20. During that four-day period, outflows totaled approximately $1.2 billion.

These ETF outflows align with Bitcoin’s stagnant price action. Currently hovering around $96,000, Bitcoin has remained range-bound since mid-November, fluctuating between $90,000 and its all-time high of approximately $109,000, recorded on Jan. 20.

Macro Concerns

Experts say Bitcoin ETF outflows reflect rising investor uncertainty amid sluggish Bitcoin prices and macroeconomic concerns. Higher-than-expected inflation data from Thursday’s Producer Price Index (PPI) and Wednesday’s Consumer Price Index (CPI) reports has weakened market optimism for March rate cuts, adding to caution.

Joseph Dahrieh, Managing Principal at Tickmill, said January's stronger-than-expected U.S. inflation data weighed on digital asset prices this week, leading traders to anticipate a slower pace of Fed rate cuts.

“This market reaction has resulted in a short-term bearish outlook, with Bitcoin and the broader crypto market facing heightened caution," he noted. “However, proposed state-level strategic Bitcoin reserve bills in 20 U.S. states could drive up to $23 billion in Bitcoin purchases, equating to 247,000 BTC.”

Alan Orwick, co-founder of Quai Network, echoed Dahrieh’s sentiment, adding that potential trade tariffs are also generating market uncertainty that may cause investors to pull back.

“Because of this, they may be reevaluating their portfolios coming off an already bullish run in 2024,” Orwick explained. “Despite this, Bitcoin's long-term value proposition as a hedge against inflation and diversification tool remains strong regardless of these short-term economic storms.”

PPI and CPI data

The PPI, which tracks the average price fluctuations domestic producers receive for their goods and services over time, rose 0.4% in January, exceeding the 0.2% consensus estimate. Meanwhile December’s figure was revised up to 0.5%. Year-over-year, PPI increased 3.4%, slightly below December’s 3.5% gain.

The CPI, which tracks the cost of goods and services across the U.S. economy, rose 0.5% in January on a seasonally adjusted basis. This pushed the annual inflation rate to 3%, according to the Bureau of Labor Statistics (BLS), up 0.1% from December’s 2.9%.