Global crypto funds have experienced the largest weekly outflows in crypto history, recording nearly $3 billion in withdrawals this week. Bitcoin and Ethereum exchange-traded funds have seen the largest outflows among the fund, with Bitcoin ETFs recording approximately $2.7 billion in outflows, while Ethereum ETFs recorded about $294 million in outflows as of February 28.
The Bitcoin ETF markets, which saw a fruitful first year after their approval in January last year, are some of the biggest losers this year. K33 Research’s head of research, Vetle Lunde, shared that the second-largest outflows in Bitcoin ETFs were recorded in May last year when the funds saw 11,964 BTC in outflows compared to the 14,579 BTC in outflows recorded this week.
U.S.-based BTC and ETH ETFs accounted for most of the weekly outflows recorded across global crypto investment funds. BlackRock’s iShares Bitcoin Trust (IBIT) had the largest outflows among U.S.-based BTC ETFs, with $244.6 million in outflows on February 28. VanEck’s HODL and Grayscale’s GBTC also recorded outflows yesterday of $7.7 million and $33.3 million, respectively. February 28 was also the only day the ETFs had positive flows, recording over $94 million in inflows.
U.S.-based ETH ETF outflows this week were led by the BlackRock ETHA ETF, which recorded over $30 million in outflows as of February 28. The Grayscale ETHE ETF also recorded outflows of $11.7 million on February 28. Other ETFs, including 21Shares, Bitwise, and Fidelity, had no activity yesterday.
BREAKING: MicroStrategy stock, $MSTR, falls -57% from its all time high seen on November 21st.$MSTR has now lost an average of -$720 million of market cap PER TRADING DAY for 62 days straight.
That's -$45 billion of market cap. https://t.co/F7tqpbDKcE pic.twitter.com/c2pawDXzwt
— The Kobeissi Letter (@KobeissiLetter) February 28, 2025
Crypto-related stocks have dropped significantly as the crypto market sentiment remains negative. The crypto and capital markets commentary The Kobeissi Letter outlined on February 28 that the Strategy (MicroStrategy) stock MSTR had dropped by 57% from its all-time high in November. The commentary added that the MSTR stock has also lost an average of $720 million from its market cap per trading day for the past 62 days, bringing the total amount lost from its market cap to about $45 billion.
Strategy was among the largest institutional investors in BTC, with Bitcoin Treasuries data revealing that the company’s BTC holdings currently stand at 499,096 BTC. The Japanese company Metaplanet has also lost about 54% from its peak. Other companies affected include Tesla, Robinhood, RIOT Platforms, Hut 8, and Coinbase.
A Finance Yahoo report from yesterday still indicated that some of the stocks had surged slightly after BTC recovered above $80,000.
Bitcoin’s price plunged yesterday to about $78,457, the lowest recorded since the beginning of November. However, the coin recovered by over 1.6% today, hovering between $84,000 and $85,000. BTC’s current price is down over 17% over the past seven days. CoinMarketCap data indicated that several other coins, including ETH, XRP, DOGE, ADA, and SOL, have also lost double-digit percentages in the past week.
The crypto plunges have led to significant sell-offs this month, seen across exchanges and crypto-related investment products. Professional Capital Management CEO and founder Anthony Pompliano still believes that the sell-offs are “normal” and could indicate that a bull market is close. Pompliano added that bull runs in the past were preceded by plunges of up to 30% due to volatility.
Political uncertainty is one of the reasons behind the current volatility
The Head of Research at CoinShares, James Butterfill, recently shared that the current volatility and fear in crypto markets mainly resulted from political uncertainty. President Donald Trump’s proposed tariffs have put a strain on crypto markets, especially since his insistence on implementing suggested tariffs on China, Canada, and Mexico. The president confirmed on February 27 that the 25% tariffs on Canada and Mexico would go into effect on March 4.
Butterfill still outlined that the policies the Trump administration wanted to implement concerning crypto would have a positive effect on digital assets in the long term. The CoinShares head of research pointed out President Trump’s recently signed executive orders related to boosting digital asset technology innovation and growth in the U.S. Butterfill also mentioned Trump’s plan to establish a strategic Bitcoin reserve for the U.S.
The market plunges also came after the Federal Reserve expressed bearish sentiment toward the U.S. GDP in this year’s first quarter. The Fed Reserve Bank of Atlanta recently speculated that the country’s GDP would drop by 1.5% in Q1 2025. However, the GDPNow tracker still indicated later that the GDP would increase by over 2% in the first quarter.
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