Spot Bitcoin exchange-traded funds (ETFs) in the US experienced their largest two-week outflow to date, driven by strained investor sentiment amid ongoing trade conflicts between the US and China.
According to Sosovalue data, US spot Bitcoin ETFs saw over $1.14 billion in cumulative net Bitcoin (BTC) outflows in the two weeks leading up to February 21.
This sell-off constituted the highest two-week withdrawal period from Bitcoin ETFs since their launch on January 11, 2024.
The recent dip in inflow surpassed the previous record set in the two weeks before June 21, 2024, when Bitcoin ETFs faced outflows totaling $1.12 billion, coinciding with Bitcoin trading at approximately $64,000.
US Bitcoin ETF net inflow, weekly, all-time chart. Source: Sosovalue
Marcin Kazmierczak, co-founder and COO of RedStone, a blockchain oracle solutions firm, noted that ETF flows serve as a “great indicator” of Bitcoin sentiment among prominent asset management firms worldwide.
Despite this, Kazmierczak told Cointelegraph that the long-term purchasing trends of Bitcoin ETFs offer a clearer understanding, stating:
“We’re looking at a monthly timeframe, which doesn’t provide the full picture. ETFs are generally considered long-term investment vehicles, so analyzing flows over a six-month or yearly period gives a more meaningful perspective.”
“When zooming out, we see that net flows have been overwhelmingly positive in the longer term,” he added.
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The unprecedented two-week sell-off from Bitcoin ETFs is largely linked to ongoing trade tensions between the US and China, particularly following the announcement of new import tariffs. Investors are on edge, anticipating US President Donald Trump’s meeting with Chinese President Xi Jinping aimed at de-escalating these trade issues.
On February 20, Trump expressed his expectation for Xi to visit the US, indicating that “it’s possible” for a new trade deal between the US and China, though he did not provide a timeline for the proposed visit, according to Reuters.
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Influences on Bitcoin ETF Flows: Monetary Policy and Interest Rate Expectations
While global trade tensions significantly impacted the Bitcoin ETF sell-off, they were not the sole contributors to the shift in investor sentiment. Kazmierczak added:
“There are many moving pieces, including interest rate expectations, regulatory developments, and overall market sentiment, that play a role.”
Nonetheless, “major players continue to hold their positions despite short-term outflows,” noted Kazmierczak, mentioning that both the Abu Dhabi Sovereign Wealth Fund and Wisconsin’s Pension Fund maintain “sizable BTC positions through ETFs” despite recent selling pressure.
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