Bitcoin hits near four-month low as ETF outflows accelerate

Bitcoin declines as institutional outflows intensify

Bitcoin slid to a near four-month low of $61,442.7 on Thursday before recovering part of its losses to trade at $63,832.4 by 01:30 ET (05:30 GMT). The cryptocurrency’s recent weakness has taken it back to levels around 50% below its October record high.

The decline has coincided with persistent capital outflows from spot Bitcoin ETFs, reflecting softer institutional appetite for crypto exposure. Data from SoSoValue showed outflows of about $396 million from Bitcoin ETFs on Wednesday alone, following roughly $1.02 billion in outflows at the beginning of the week. Over the past three weeks, institutional investors have withdrawn a combined $3.7 billion from these products.

These outflows have been driven in part by increased risk aversion amid macroeconomic disruptions associated with the U.S.-Iran war. Flows into the dollar, on expectations that a prolonged conflict could drive energy-fueled inflation, have added further pressure to non-yielding crypto assets.

Shift toward AI and broader crypto market reaction

Investors have also been reallocating capital from cryptocurrencies into artificial intelligence-related equities. According to the report, ETF outflows have been influenced by this pivot into AI stocks, which are perceived as offering identifiable fundamentals and exposure to a fast-growing technology, in contrast with non-yielding crypto assets.

Market sentiment was further affected by signals from one of the top corporate Bitcoin holders, Strategy, which executed its first Bitcoin sale in nearly four years. Although the volume sold was small, the move prompted renewed scrutiny of Strategy’s treasury model, which depends on Bitcoin prices rising steadily over time.

Broader crypto prices moved lower in tandem with Bitcoin. Ether, the world’s second-largest cryptocurrency, fell 4.6% to $1,785.40, while XRP declined 4.1% to $1.1882. Solana, Cardano, and BNB dropped between 5% and 9%. Among memecoins, Dogecoin fell 4%, and $TRUMP slid 7.8%.

The report notes a general dearth of positive catalysts for the crypto sector, with continued uncertainty over the U.S.-Iran war and a lack of clarity on peace negotiations weighing on risk appetite, particularly for speculative, non-yielding assets.

FAQ

Why did Bitcoin drop to a near four-month low?
Bitcoin declined due to sustained institutional outflows from spot Bitcoin ETFs, increased risk aversion stemming from the U.S.-Iran war, shifts in capital toward AI stocks, and stronger demand for the U.S. dollar.

How large were the recent Bitcoin ETF outflows?
According to SoSoValue data, Bitcoin ETFs saw about $396 million in outflows on Wednesday, on top of roughly $1.02 billion earlier in the week, contributing to a total of $3.7 billion withdrawn over the last three weeks.

How did other major cryptocurrencies perform?
Ether fell 4.6% to $1,785.40, XRP dropped 4.1% to $1.1882, while Solana, Cardano, and BNB declined between 5% and 9%. Dogecoin lost 4%, and $TRUMP fell 7.8%.

What role did Strategy’s Bitcoin sale play in market sentiment?
Strategy’s first Bitcoin sale in nearly four years, though small in size, sent a bearish signal to the market and raised questions about the long-term viability of its Bitcoin-based treasury model.