3.8 Billion Dollar Exit! Bitcoin ETF Faces the Longest "Bleeding" Period in History

In the financial markets, capital is always the most honest voter. When funds have been continuously withdrawn from the U.S. spot Bitcoin ETF for five consecutive weeks, the market must face a reality: the once fervently bullish institutions on crypto assets are collectively hitting the “pause” button.

According to the latest data from SoSoValue, as of the week ending February 20, the U.S. spot Bitcoin ETF experienced a net outflow of $316 million, marking the fifth consecutive week of capital withdrawal, with a total withdrawal of $3.8 billion. This ongoing “capital retreat” lasting over a month not only sets the longest outflow record since the product’s launch but also prompts the market to reassess the short-term prospects of crypto assets.

1. Record-breaking “Five Consecutive Downward Days”: The Path of Withdrawal Behind the Data

If we extend the timeline, the severity of this capital outflow becomes clear.

1. Accelerating Losses, Record Weekly Outflows

● Over the past five weeks, capital outflows have shown a “stepwise” increase. Especially in the week of January 30, with a net outflow of $1.49 billion, it became the largest single-week capital outflow since the launch of the spot Bitcoin ETF.

● Although there were occasional rebounds on certain trading days—such as last Friday’s net inflow of about $88 million—these sporadic recoveries are like a drop in the bucket against the tide of redemptions, unable to reverse the overall downward trend.

2. Leading Players “Take the Lead” in Outflows

● From a product structure perspective, this capital withdrawal is not a small-scale retail sell-off but a systematic repositioning by institutional investors. Data shows that industry leader BlackRock’s IBIT has become a major outflow target, with a weekly net outflow of $303 million, nearly accounting for the entire weekly outflow.

● Following closely is Fidelity’s FBTC, with a weekly outflow of $19.59 million. This sends a clear signal: even the top players are currently shrinking their risk exposure.

3. Grayscale Mini ETF as the Only Bright Spot

● Amid the somber atmosphere, Grayscale’s Bitcoin Mini Trust (BTC) recorded a net inflow of $35.97 million last week, becoming the only highlight. This may reflect some investors seeking lower-fee safe havens, but the solitary effort of a single product cannot offset the overall chill.

2. Simultaneous Pressure: Ethereum ETF Also Struggles to Stand Out

The bearish trend in Bitcoin ETFs is not an isolated event; the entire digital asset ETF family is experiencing a winter.

● In line with Bitcoin ETFs, the U.S. spot Ethereum ETF also posted a “five consecutive down” streak. In the past week, Ethereum ETF experienced a net outflow of about $123 million, with BlackRock’s ETHA product leading the outflows at $102 million.

● This synchronized pressure on Bitcoin and Ethereum products is interpreted by market analysts as a sign of an overall contraction in digital asset allocation. BlockBeats analysis indicates that the capital withdrawal is not due to fundamental issues with individual assets but a strategic reduction of overall digital asset exposure by investors amid macroeconomic shifts. When the tide recedes, neither the market leader nor the runner-up can remain unaffected.

3. Deep Dive: Who Is Actually Withdrawing?

To understand this wave of withdrawals, one must look beyond the crypto circle itself and consider the macroeconomic “sky” that has changed.

1. Macro “Straitjacket”: From Rate Cut Expectations to Hawkish Shadows

● The core driver of this capital outflow is the market’s volatile expectations regarding Federal Reserve monetary policy. Entering 2026, although there was high anticipation of rate cuts, repeated U.S. inflation data and the potential hawkish stance of the new Fed chair (such as Kevin Woor) have led to a reevaluation of liquidity expectations.

● An analysis by Nasdaq suggests that Woor’s historical record leans hawkish, likely through balance sheet reduction to tighten financial conditions, directly impacting crypto markets that rely on liquidity. When “cheap money” is no longer available, high-risk assets naturally take the hit.

2. Trade War 2.0: Resurgence of Tariff Uncertainty Fuels Safe-Haven Flows

● Besides monetary policy, the renewed trade tensions have heightened market panic. Analyst Linh Tran notes that after courts rejected Trump’s tariffs, the government announced new global taxation plans, significantly increasing trade uncertainty. Under this backdrop, investors prefer holding cash and bonds over volatile assets like Bitcoin.

3. Institutional “Smart Money”: Risk Reduction Rather Than Structural Abandonment

● A noteworthy detail is that despite ongoing outflows, since the product’s launch, the cumulative net inflow into spot Bitcoin ETFs remains high at $54.01 billion, with a total net asset value of about $85.31 billion, accounting for 6.3% of Bitcoin’s total market cap. This indicates that long-term strategic holdings are still in place.

● Market insiders generally believe that this round of outflows mainly reflects institutional risk reduction and portfolio rebalancing. Under the triple pressures of geopolitical risks, trade frictions, and macro uncertainties, risk management departments have issued early warnings, prompting trading desks to cut risk exposure—standard asset management practice rather than a structural “death sentence” for crypto assets.

4. Future Outlook: Where Is the Turning Point?

Currently, investors are most concerned about how long this bloodletting will last.

● In the short term, pressure remains. Market sentiment and macro data are highly correlated, and until the Federal Reserve’s policy path becomes clearer, institutional funds are likely to remain defensive, controlling risk exposure.

● However, opportunities often emerge amid pessimism. Industry experts believe that if U.S. macroeconomic data weaken further, it could actually be a positive signal—weak data would reinforce expectations of rate cuts. Once the “rate cut trade” reemerges as the main market theme, crypto ETFs could see a strong influx of capital.

● Additionally, the sustained enthusiasm in AI could serve as a “resurrection agent” for risk appetite. Some analysts suggest that if AI giants like Palantir continue to deliver better-than-expected earnings, boosting the tech sector, the improved risk appetite might spill over into the crypto market.

● Ultimately, the $3.8 billion withdrawal is a macro stress test and a gauge of the quality of crypto assets. For long-term believers, this retreat is just a pause in a long journey; for short-term traders, it’s undoubtedly the most turbulent time.

● The storm is not over; funds are still on the sidelines. The next turning point for Bitcoin ETFs may lie in tomorrow’s non-farm payroll data or the next Federal Reserve chair’s speech.