U.S. spot Bitcoin exchange-traded funds (ETFs) have experienced a four-day streak of outflows, shedding a total of $1.62 billion, as hedge funds retreat amid declining basis trade yields and heightened macroeconomic uncertainty. The sustained redemptions mark one of the largest consecutive periods of net outflows since these ETFs launched in early 2024.
The selling pressure began last Friday with $395 million withdrawn and accelerated in the days that followed: $483 million on Tuesday, a staggering $709 million on Wednesday, and a further $32 million on Thursday, according to SoSoValue data. This flurry of activity underscores how quickly institutional investors can move when profitable trading opportunities shrink.
Bitwise Chief Investment Officer Matt Hougan pointed to a collapse in the Bitcoin basis trade as a key factor behind the ETF withdrawals. This strategy, which seeks to profit from discrepancies between spot and futures prices, has seen yields tumble to below 5% from 17% a year ago, according to Amberdata. “When you see sustained outflows across the most liquid crypto ETPs, it usually indicates hedge funds are pulling back,” Hougan told Decrypt. While these funds represent only an estimated 10–20% of ETF holders, their rapid movements can dominate short-term flows.
The retreat has coincided with a broader risk-off tone in global markets. The S&P 500 gapped down nearly 54 points over the weekend following a pullback from record highs, while Bitcoin itself has struggled to hold levels above $97,000. The cryptocurrency currently trades around $89,500, down 5.4% over the past week. Investor sentiment has grown more cautious: prediction markets now assign a 30% probability that Bitcoin could drop to $69,000, up from just 11.6% last week.
Market watchers suggest the current pressure reflects both the absence of large players at these levels and the increasing role of Bitcoin as a macro asset. Jordan Jefferson, founder of DogeOS, noted that similar patterns emerged during prior periods of economic stress. Analysts say a stabilisation in macro conditions—or improved basis trade profitability—would be key to reversing the trend. The Federal Reserve’s upcoming leadership changes are also likely to influence investor risk appetite.
Hougan added that renewed retail interest could help revive the basis trade, but long-term ETF growth depends on slower-moving capital from financial advisors. “I remain confident we’ll be moving to new all-time highs this year,” he said. “But this crypto bull market is not going to be like markets past. We’re in a grind now, not a rocket ship.”
