Investor Caution Grows as Bitcoin ETFs See Unprecedented Outflows

Bitcoin ETFs in the U.S. have seen their largest two-week outflow since their introduction, with investors pulling over $1.14 billion amid mounting concerns over trade tensions between the U.S. and China.

This withdrawal, spanning the two weeks before February 21, set a new record, surpassing the June 2024 outflow of $1.12 billion when Bitcoin was priced around $64,000.

Marcin Kazmierczak, co-founder of blockchain oracle provider RedStone, noted that while ETF flows reflect institutional sentiment toward Bitcoin, short-term trends can be misleading. He argued that a broader perspective—spanning six months to a year—provides a more accurate picture, emphasizing that long-term net flows remain positive despite periodic sell-offs.

One of the primary factors behind the latest withdrawal surge appears to be the intensifying trade friction between the U.S. and China, triggered by new import tariffs.

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Market participants are awaiting potential developments from an anticipated meeting between U.S. President Donald Trump and Chinese President Xi Jinping, though no confirmed date has been announced. Trump hinted that negotiations could lead to a new trade deal but refrained from offering a specific timeline.

Beyond trade-related concerns, other economic variables have also influenced the sell-off. Kazmierczak pointed to shifting expectations around interest rates, evolving regulatory landscapes, and overall market sentiment as significant drivers. Despite the recent selling pressure, major institutional investors such as the Abu Dhabi Sovereign Wealth Fund and Wisconsin’s Pension Fund continue to maintain substantial Bitcoin ETF holdings, signaling their confidence in Bitcoin’s long-term trajectory.

Alexander Stefanov