US spot Bitcoin exchange-traded funds (ETFs) recorded approximately $1.16 billion in net outflows over three trading sessions, raising concerns about investor sentiment. However, Bitwise believes the withdrawals reflect short-term market uncertainty rather than a broader decline in institutional interest.
According to SoSoValue data, investors withdrew $643 million on Friday, $399 million on Monday and another $116 million on Tuesday. Bitwise Head of Research André Dragosch attributed the outflows to a temporary risk-off environment following concerns surrounding a reported $6.3 billion Binance-linked hack.
Dragosch said institutional investors have largely maintained their Bitcoin ETF exposure despite market volatility. He cited a Bitwise survey of 15 institutions, none of which reported reducing their Bitcoin ETF holdings during the bear market. He also noted that retail investors account for most ETF holdings and tend to react more strongly to market fluctuations.
Meanwhile, Bitcoin ETF withdrawals slowed on Tuesday as market sentiment showed some improvement. The Crypto Fear & Greed Index climbed to 34 from 26, although it remained in the fear territory. Bitcoin also gained around 1.6% over 24 hours to trade near $78,000 at the time of publication. Despite the recent withdrawals, Dragosch maintained that institutional interest in Bitcoin remains largely intact.
