BlackRock’s iShares Bitcoin Trust (IBIT) saw its largest single-day outflow ever, with investors withdrawing 5,000 BTC, which equates to approximately $420 million on February 26. This event sets a new record for the fund, surpassing the previous record of $332 million that was withdrawn on January 2.

The market as a whole is under pressure, with total outflows from various Bitcoin ETFs reaching $756 million for the day, according to preliminary data from CoinGlass.

The continued outflows come on the heels of a staggering $1.1 billion exit on February 24, marking a seven-day streak of withdrawals nearing $3 billion in total.

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Fidelity’s Bitcoin ETF Sees $145.7 Million Outflow Amid Market Sell-Off

Fidelity’s Wise Origin Bitcoin Fund (FBTC) contributed significantly to the outflows on that same day, shedding $145.7 million.

Other funds like Bitwise, Ark 21Shares, Invesco, Franklin, WisdomTree, and Grayscale recorded outflows ranging from $10 million to $60 million.

The recent sell-off has heavily impacted the cryptocurrency market, resulting in a 5.6% dip in market capitalization to $2.9 trillion on February 26. Bitcoin itself dropped to a low of $82,455, marking a 25% correction from its all-time high reached on December 17.

Despite this decline, some analysts remain hopeful. Ki Young Ju, CEO of CryptoQuant, advised against panic selling, noting that a 30% correction is standard during Bitcoin bull cycles. He pointed out that Bitcoin fell 53% in 2021 before rebounding to achieve new heights.

FIDELITY SOLD
ARK SOLD
GRAYSCALE SOLD
BUT BLACKROCK… ALSO SOLD $150M $BTC
— Arkham (@arkham) February 26, 2025

Industry experts, including Arthur Hayes from BitMEX, indicate that much of the selling pressure is attributed to hedge funds utilizing Bitcoin ETFs for arbitrage rather than as long-term investments. With these yield opportunities diminishing, many traders are unraveling their positions, contributing to the ongoing outflows. Hayes predicts Bitcoin might drop to $70,000 if ETF outflows persist.

Adding to market uncertainty, traders are focusing on a support level of $74,000 amid economic concerns, including potential trade tariffs from U.S. President Donald Trump.

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Over Half of Spot Bitcoin ETF Investors Engage in Arbitrage Strategies, Says 10x Research

Markus Thielen, head of research at 10x Research, mentioned that over half of spot Bitcoin ETF investors partake in ETF arbitrage strategies. He reported that a striking 56% of inflows are linked to these strategies, particularly the “carry trade.” Thielen emphasized that even though the unwinding of these trades leads to significant ETF outflows, the process remains market-neutral, as ETFs are sold concurrently with Bitcoin futures, effectively balancing broader price impacts.

Key Takeaways:

• BlackRock’s Bitcoin ETF experienced record outflows of 5,000 BTC ($420 million) on February 26.
• The overall crypto market faced a 5.6% decline, with Bitcoin falling to $82,455.
• Analysts attribute the ongoing sell-off to the unwinding of hedge funds’ arbitrage positions.