Bitcoin ETF experienced net withdrawals on most trading days this month. March opened with continuous outflows and extended the recession that began with Late February.
There was a daily net spill between March 3rd and March 7th – about $74 million on March 3rd, $143 million on March 4th, $134 million on March 6th, and about $409 million on March 7th.
There was a short midweek rest around March 5th (with almost flat flow), but overall, the trend was critically negative, with investors consistently drawing capital from Bitcoin ETF products. Even as the second week of March began, the wave of redemption continued. For example, on March 10th and March 11th, net outflows were seen between $350 and $370 million, respectively. If this period is declared, only a very small influx would be declared, and March has been one of the most withdrawal months since the launch of Bitcoin ETFs in January 2024.
March continues its net outflow trend from Spot Bitcoin ETFS, reflecting a clear reversal from the strong inflow seen earlier this year. data Coinshares showed that this multi-week stretch outflow totaled around $4.5 billion to $4.8 billion, leaving behind digital asset investment products. Investors who had been steadily allocated to Bitcoin ETFS by January suddenly became net sellers by late February, and did so until March.
A significant turning point occurred in mid-February. After a streak of unprecedented influx (post-US elections) that accumulated around $29.4 billion, the market saw its first significant weekly outflow of $415 million on February 17th.
Unlike the early part of the year when inflows were standard, March’s flow patterns were mostly one-way (outdoor). There were no major sustained inflow days in the moon. There was only one “relief” on isolated days when the spill was temporarily slowed or the positive test was temporarily turned over. For example, at the end of February (February 28th), a daily inflow of about $370 million broke the eight-day outflow streak, with one modest inflow date (or essentially a flat flow) seen in early March. But these have proven to be fleeting. By the next trading session, the spills had resumed and in some cases accelerated.
This “two step back, one step forward” pattern indicates the prevalence of bearishness. The small influx was overwhelmed by the greater redemption that followed. Peak Outflow Days in March – March 7th, March 10th and March 11th stand out as events like a surrender that saw sales pressure rise. The approximately $409 million spill on March 7 was particularly impressive, with the approximately $409 million spill on March 10th and March 11th being slightly smaller (a net of about $367 million each). These peaks suggest that multiple large institutions are withdrawing funds simultaneously.
One observable pattern is that the spill gained momentum throughout the week, often peaking towards the end of the week. For example, a snowball net drawer from Monday to Friday in the first week of March. A similar phenomenon appeared in the second week, leading to a massive outbreak on March 10th and March 11th. This could indicate that negative news has accumulated, Bitcoin prices have fallen (causing a halt or risk management), and that more investors have joined the Book of Egypt as the week progresses. The lack of consistent inflow also indicates a weak decline due to institutions through ETFs during this period.
Volatile ETF flow followed the roller coaster at the price of Bitcoin. At the beginning of the month, Bitcoin swung to around $90,000 (it briefly reached $94,000 on the first day of March) before turning the course back sharply. By mid-March, among the heaviest outflows, prices had plummeted about 15% to 20% from their peak. This period included the biggest price fluctuations of the year.
For example, when news of Trump’s executive order shocked the market on March 7th, spot prices for Bitcoin fell by 5% that day, down more than 2%, reflecting a surge in ETF red. Bitcoin slid from about $94,000 to $80,000 on March 3 and March 4, and the massive spill on March 10 coincided with Bitcoin reaching $77,000 to $78,000 from four months before it bounced.
Large-scale Bitcoin ETF spills can be converted directly into sales pressure on the underlying assets. When investors redeem their shares, ETFs will need to sell Bitcoin to raise cash, increasing supply in the market. This mechanism could have exacerbated the price drop during March. The data shows the feedback loop between ETF flow and price volatility. With prices falling rapidly in early March, some institutional owners may have been surprised by the withdrawal (to reduce losses or reduce risk), and could force the sale of additional Bitcoin with funds, reducing prices even further.
This cycle of price drops and accelerated outflows is a hallmark of the short-term yield stage. The result was an unusually turbulent price action. Bitcoin trading range in March was wide (approximately $80,000-$92,000 in the second half of the month), with a rapid swing consistent with the decline and currents of ETF investment. In contrast, the price of Bitcoin began as the leak finally began to ease towards the end of the month Stabilization recovery.
The patterns of ETF flow seen in March reflect a significant shift in institutional investors’ sentiment. The big overhang was the policy outlook for the Federal Reserve. In mid-February Chairman Jerome Powell signaled a more hawkish attitude, with US inflation data higher than expected. Very sensitive to interest rate expectations, Bitcoin responded negatively. The institution withdraws money when it realized that interest rates could be longer. These Hawkish signals “spurred” the initial wave of outflow, thus breaking the long inflow streak.
By March, institutional investors remained on the defense due to the prospects of ongoing close monetary policy (and not easing the immediate Fed pivot). Fearing that higher interest rates would strengthen the dollar and attenuate the appetite of alternative assets, Bitcoin ETFs were unattractive in the short term.
March also brought remarkable US policy news that had an impact on emotions. It was built at the beginning of the month around US rumors that are rumoured to be a “strategic Bitcoin reserve.” But when it comes to Trump signature The March 6th executive order disappointed traders by establishing a reserve and not mandating immediate purchases of Bitcoin. The announcement was subtle – it created a framework for the National Bitcoin Reserve (using seized assets primarily and directing budget-neutral acquisition strategies).
But it never unleashed the new government’s purchase of Bitcoin. This has not reached the market’s hopes and exemplified the “buy rumors and sell news” scenario. Many investors may have bid for Bitcoin in anticipation of bullish government action only if the actual policy is less affected. The day after the executive order on March 7, there was a massive spill of over $370 million from the ETF, causing prices to drop significantly due to market disappointment.
Additionally, Trump’s broader economic policies played a role. The administration’s new trade tariffs and harsh talks about trade have led to concerns about global growth. Such geopolitical tensions and protectionist measures tend to make large investors more risk-averse. In addition to this, the White House Script Summit raised hopes for a supportive signal, but in the end Did not provide bullish catalystshe does little to sell.
Bitcoin’s turbulent time during ETF leaks in March first appeared in Cryptoslate.
