Bitcoin Exchange-Traded Funds (ETFs) experienced significant net outflows last week, totaling approximately $290 million, as global market sentiment shifted to a cautious “risk-off” stance amid escalating geopolitical tensions and diminishing ceasefire hopes. Data from Farside Investors revealed that between March 24 and March 27, cumulative ETF outflows reached around $296 million, with BlackRock’s IBIT fund facing the most substantial withdrawals.
On Friday alone, the IBIT ETF saw a staggering outflow of $201.5 million, contributing to the day’s total of $225.5 million in U.S. spot Bitcoin ETF outflows—the largest single-day drop of the week. This marked a stark contrast to earlier in the week when the market had generated a positive influx of $167.2 million on Monday.
Market analysts have attributed the bearish momentum to several macroeconomic factors and geopolitical developments. Josh Gilbert, a market analyst at eToro, noted a decrease in Bitcoin’s value, which fell to a three-week low, coinciding with the S&P 500’s fifth consecutive weekly loss—its longest losing streak since 2022. He pointed out that rising oil prices are fueling concerns about inflation, which is further pushing expectations for rate cuts out into the future. This delay in potential rate cuts dampens the support for risk assets like Bitcoin.
Contributing to the cautious market environment, President Donald Trump recently indicated the possibility of seizing Iranian oil resources, heightening geopolitical risks. Gilbert mentioned that while a ceasefire could lead to a “strong relief rally,” the absence of credible de-escalation in the region suggests more instability ahead, with markets likely to remain volatile.
Peter Chung, head of research at Presto Labs, acknowledged the “risk-off” sentiment as a primary influence on last week’s outflows but described the figure as not overly alarming compared to historical trends. He suggested that the waning expectation for a ceasefire due to faltering peace talks likely exacerbated the situation.
Pratik Kala, head of research at Apollo Crypto, supported this analysis, linking the outflows not only to shifting risk sentiments but also to periodic rebalancing activities typical for the end of a quarter. He remarked that while the $290 million outflow is significant, it is relatively normal in the context of broader market behavior.
Despite the turbulence, experts maintain that Bitcoin’s position compared to other asset classes remains notable. Some cautioned against attributing too much significance to weekly flow data, emphasizing that ETF inflows and outflows can be influenced by various trading strategies, including basis trading by hedge funds.
Gilbert expressed concern over ongoing market tensions, stating that while Bitcoin has shown resilience throughout the conflict, it is not immune to broad market sell-offs. He highlighted the potential impacts of an anticipated Federal Reserve interest rate hike, contrasting sharply with earlier market expectations for rate cuts. Upcoming remarks by Fed Chair Jerome Powell may further influence market sentiment.
Current trading data indicates that Bitcoin is priced at $67,574, reflecting a slight 1.4% increase in the last 24 hours, after briefly dipping into the $65,000 range. Meanwhile, sentiment on platforms like Myriad suggests a bearish outlook, with users estimating a 56.8% likelihood of Bitcoin’s price falling to $55,000 rather than rising to $84,000.
