In a significant market shift, over $290 million exited Bitcoin exchange-traded funds (ETFs) last week, reflecting a pervasive “risk-off” sentiment amid escalating geopolitical and macroeconomic pressures. According to Farside Investors, the cumulative weekly outflows amounted to approximately $296 million from March 24 to March 27, with substantial redemptions primarily stemming from BlackRock’s IBIT and other prominent funds.
The most striking move came on Friday, when IBIT alone accounted for $225.5 million of the total U.S. spot Bitcoin ETF outflows. This capped a week of high volatility that began with a substantial inflow of $167.2 million on Monday before overall sentiment took a downturn.
Josh Gilbert, a market analyst at eToro, noted the prevailing risk-off mood across markets. He cited Bitcoin’s decline to a three-week low alongside the S&P 500’s fifth consecutive weekly loss, marking its longest losing streak since 2022. Gilbert pointed out that macroeconomic challenges are compounding, stating, “Triple-digit oil is fuelling inflation fears, which pushes rate cut expectations further out, which in turn removes the very catalyst that risk assets need to find a floor.”
The geopolitical landscape took a concerning turn on Monday when former President Donald Trump hinted at potentially seizing Iranian oil and Kharg Island, a crucial fuel hub. This heightening of geopolitical tensions contributed to a defensive market stance, with Gilbert warning that, barring credible de-escalation, investors should prepare for “more choppy sessions ahead.”
Peter Chung, head of research at Presto Labs, stated that the risk-off sentiment was the key driver behind the outflows, although he suggested that the scale of last week’s exits was not particularly dramatic when viewed in the context of recent trends. He observed that the easing expectation for a ceasefire contributed to the downfall as peace negotiations faltered towards the week’s end.
Pratik Kala, head of research at Apollo Crypto, echoed this perspective, attributing the outflows to “risk-off sentiment and end of quarter rebalancing.” He characterized the $290 million outflow figure as “quite normal” and highlighted Bitcoin’s relative strength compared to other asset classes. Furthermore, he advised caution in interpreting weekly flow data, noting that ETF movements often involve significant basis trading by hedge funds, which may not indicate structural changes in the market.
Despite the ongoing tension, Gilbert remarked that Bitcoin exhibits resilience, having performed surprisingly well despite its reputation as a risk asset. However, he cautioned that the increasing likelihood of a Federal Reserve rate hike—which contrasts sharply with the previous expectations for multiple rate cuts—could further pressure the market. Upcoming remarks from Fed Chair Jerome Powell may add more uncertainty.
Market sentiment appears bearish on platforms like Myriad, where users are pricing in a 56.8% probability of Bitcoin falling to $55,000, compared to a likelihood of climbing to $84,000. As of the latest data, Bitcoin was trading at $67,574, reflecting a 1.4% increase over the previous 24 hours after dipping into the $65,000 range earlier on Monday.
