In the last month, U.S. spot bitcoin (BTC) ETFs have seen an outflow of $180 million, marking one of the highest withdrawal rates since trading commenced in early 2024.
The performance of these ETFs has been lackluster in 2025, primarily due to bitcoin’s disappointing price movement, which has declined by approximately 10%. Despite a recent increase of about $700 million in net inflows over the past five days, the cumulative net inflows since launch are at $36.1 billion, as reported by Farside data.
Two key factors have contributed to the exits seen this past month: increased volatility in bitcoin’s price and the unwinding of the basis trade.
This year, bitcoin’s price has experienced considerable volatility, peaking at $109,000 in January during the onset of President Donald Trump’s administration, driven by expectations of favorable crypto regulations. However, it subsequently dipped to $76,000 at the beginning of March due to concerns surrounding Trump’s tariff-driven trade policies.
During times of heightened volatility, retail investors often react emotionally, leading them to sell off their holdings as they would with any other high-risk asset.
Institutional investors are also unwinding the basis trade, a strategy that involves buying into the ETF while shorting CME bitcoin futures. A short position bets on a price decrease, creating a delta-neutral position that both benefits from the premium of futures over the spot price while minimizing directional risk.
Currently, this arbitrage opportunity presents a yield of about 2%, the lowest since the ETFs were approved. As U.S. Treasuries offer safer investments with higher returns, many investors are choosing these lower-risk options.
ETF inflows and outflows can often indicate market turning points. When outflows become particularly aggressive, they frequently align with local price bottoms for bitcoin, especially when analyzed through a 30-day moving average. This trend was evident recently when bitcoin reached its low in March, as well as during similar declines in April and August of 2024.
