Spot Bitcoin exchange-traded funds (ETFs) experienced their worst day on record this week since their debut last year as investors dumped more than $1 billion worth of investments within 24 hours.
The group of 11 SEC-approved Bitcoin ETFs experienced their largest-ever outflows on Tuesday, according to data compiled by crypto analytics firm CoinGlass. That far exceeds the previous record of $672 million in daily outflows set in December. Tuesday’s rout follows a six-day decline during which the assets lost more than $2 billion overall as investors fled amid concerns of economic uncertainty.
The record outflows come as Bitcoin itself—and the broader crypto market—experience the biggest selloff since the election of President Trump in November. Since the beginning of February, the original cryptocurrency’s price has tumbled from more than $100,000 to less than $85,000, flailing under the weight of Trump’s tariff policy, the historic hack of crypto exchange ByBit, and multiple memecoin scandals.
James Seyffart, an ETF analyst at Bloomberg, told Fortune that some of the outflow is likely the result of retail investors deciding to sell now and lock in gains from the recent bull market, as they expect more pain to come. “People are probably just diversifying their exposures or unwinding some of their Bitcoin exposure,” he said.
But he added that some of the ETF losses may also be the result of large institutional investors like hedge funds engaging in basis trading—a strategy that seeks to make profit off of the difference between the spot price of a commodity and the price of a futures contract on the same commodity.
Although the latest spot Bitcoin ETF movements are significant within the crypto world, these kinds of swings are not shocking for traditional financial markets, says Seyffart. For most non-crypto ETFs, it’s normal to see large amounts of inflows and outflows. “We’re talking about billions of dollars coming out of these ETFs in a rather short period of time. But for now, it’s still par for the course for an ETF category,” he said.
James Butterfill, head of research at ETF issuer CoinShares, echoed the sentiment, telling Fortune that $1 billion is just a small fraction of the total $100 billion invested in Bitcoin ETFs.
“It’s actually quite small in the grand scheme of things,” he said. “So it’s not particularly damaging.”
