Bitcoin ETFs See Record Drawdown as $8.9B Exits During BTC Correction

Record $8.9B outflows hit Bitcoin ETFs during price correction, but $1.5B in fresh inflows suggest demand is returning.

Bitcoin spot ETFs have recorded their largest capital drawdown since launching in January 2024. Roughly $8.9 billion exited the funds during the selloff, leaving many institutional buyers underwater. Despite the pressure, fresh inflows are now returning to the market. 

Bitcoin ETFs See Largest Capital Exit Since Launch

Bitcoin fell below $70,000, causing losses for many institutions that bought BTC through spot ETFs. According to analyst Darkfost, investors pulled about $8.9 billion from Bitcoin ETFs during the correction. That is the largest withdrawal since the ETFs launched in January 2024.

Most ETF investors bought Bitcoin at an average price of around $79,000. Since BTC is currently trading below that level, many of those investors are holding their positions at a loss.

The $79,000 level is only an estimate of the average purchase price. It does not track every internal trade inside the ETFs, but it still gives a general idea of where most investors entered the market.

Bitcoin dropping below $70,000 caused the value of Bitcoin ETF holdings to fall sharply. BlackRock’s iShares Bitcoin Trust (IBIT) saw the largest impact. The fund reduced its holdings by more than 42,000 BTC, down from a peak of over 806,000 BTC.

Moreover, this drop represents one of the largest reductions in Bitcoin held by an ETF since the products launched. Because IBIT is the largest Bitcoin ETF, its inflows and outflows often influence broader institutional demand.

ETF Inflows Signal Recovery as BTC Climbs Back Above $71K

After the dip, signs of recovery appeared over the past five trading days. Around $1.5 billion has flowed back into spot Bitcoin ETFs during that period. BlackRock’s IBIT is leading the rebound. 

The fund attracted $263 million in inflows on March 2 alone. Total inflows into IBIT have reached $882 million this week, putting it well ahead of other Bitcoin ETFs.

In addition, other ETFs are seeing fresh demand. Fidelity’s FBTC recorded $156 million in weekly inflows, while Bitwise’s BITB added $148 million. Even Grayscale’s GBTC, which previously saw steady outflows, reported $102 million in inflows during the week.

Capital is returning across the Bitcoin ETF market, suggesting sentiment may be improving. Almost all the 10 original spot BTC ETFs recorded net inflows during the week. This month began with the strongest signal of renewed demand.

According to Coinglass data, spot Bitcoin ETFs posted $458 million in net inflows, while none of the twelve listed funds reported outflows that day. Meanwhile, the total assets held by spot BTC ETFs now stand at about $93.11 billion.

Since their launch, cumulative net inflows across the products have reached roughly $55.8 billion. On the other hand, Bitcoin’s price has also started to rebound from recent lows. At press time, BTC traded at $71,346, rising 6.52% over the past 24 hours despite ongoing geopolitical tensions in global markets.

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