Bitcoin ETFs Hit by Investor Retreat

The U.S. Bitcoin spot ETF market has encountered a notable slowdown, with recent data showing $180 million in net outflows over the past 30 days.

This marks one of the highest withdrawal rates since the market’s inception in early 2024. This downturn signals a change in investor sentiment, influenced by heightened market volatility and a retreat from cash-carry trading strategies.

While Bitcoin ETFs saw strong enthusiasm in 2024, they have not performed as well in 2025, with a significant reduction in inflows. Bitcoin’s price has faced challenges, dropping approximately 10% since the beginning of the year, despite a brief surge of $700 million in net inflows over the past five days. Total inflows since the launch of the Bitcoin ETF have reached $36.1 billion, according to Farside data.

Several factors have contributed to this shift in market dynamics. One key element is Bitcoin’s sharp volatility, which saw the price soar to $109,000 in January following the optimism around President Donald Trump’s policies, only to fall to $76,000 in March as concerns about potential tariffs grew. Retail investors, often reacting to such volatility, have been selling off their holdings in response to the increasing uncertainty.

READ MORE:

Economist Slams Bitcoin Reserve, Warns of Investor Losses Under Trump

Another factor is the reduction in cash-and-carry arbitrage strategies employed by institutional investors. These investors had been taking short positions in CME Bitcoin futures while simultaneously holding long positions in Bitcoin ETFs, profiting from the price difference between futures and spot markets. However, the returns from this strategy have dwindled to just 2%, the lowest since the ETF’s approval, prompting many to exit this trade. With U.S. Treasury bonds offering higher returns, many institutional investors are opting for safer, lower-risk investments instead of continuing with Bitcoin arbitrage.

Alexander Stefanov