Bitcoin ETFs record largest outflow amid U.S.-China trade conflict
US-based spot Bitcoin ETFs have recorded their largest-ever two-week outflow, driven by rising trade tensions between the US and China.
As reported by Cointelegraph, over the two weeks leading up to February 21, Bitcoin ETFs saw more than $1.14 billion in outflows, marking the biggest withdrawal since trading began on January 11, 2024.
This figure surpassed the previous record, set in the two weeks leading up to June 21, 2024, when Bitcoin ETFs saw $1.12 billion in outflows, while Bitcoin was trading at around $64,000.
Bitcoin ETFs as an indicator of investor sentiment
According to Marcin Kazmierczak, co-founder and COO of RedStone, Bitcoin ETFs serve as a key indicator of market sentiment among major financial institutions. However, he emphasizes that long-term trends should be analyzed for a more accurate assessment.
“We’re looking at a one-month timeframe, but that doesn’t provide the full picture. ETFs are generally considered long-term investment vehicles, so analyzing flows over a six-month or yearly period offers a more meaningful perspective,” he stated.
Kazmierczak highlights that in the long term, net inflows into Bitcoin ETFs remain positive, despite short-term fluctuations.
What influences Bitcoin ETF movements?
The record ETF sell-off is linked to escalating trade tensions between the US and China, which intensified after the introduction of new import tariffs.
Investors are closely watching the upcoming meeting between US President Donald Trump and Chinese President Xi Jinping, which could help ease trade-related risks. However, Trump has only speculated about Xi’s possible visit to the US, without confirming specific dates for negotiations.
While global trade tensions are a significant factor, they are not the sole catalyst behind the Bitcoin ETF downturn.
"The market is influenced by multiple factors, including interest rate expectations, regulatory developments, and the overall investment climate," says Kazmierczak.
Despite short-term sell-offs, major institutional investors continue to hold substantial Bitcoin positions. Notably, the Abu Dhabi Sovereign Wealth Fund and Wisconsin’s Pension Fund still maintain significant BTC holdings through ETFs, despite recent selling pressure.
Meanwhile, just over a year after their launch in January 2024, US spot Bitcoin ETFs have surpassed $750 billion in cumulative trading volume.
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