BTC ETF Withdrawals and Price Volatility

Over the past 30 days, a net $180 million has flowed out of U.S. spot bitcoin (BTC) ETFs, marking one of the highest rates of withdrawals since their trading began in early 2024.

Performance in 2025

The ETFs have struggled in 2025, experiencing sluggish inflows primarily due to bitcoin’s weak price performance, which is down approximately 10%. Despite a brief uptick in the last five days, resulting in about $700 million in net inflows, the total since launch now stands at $36.1 billion, according to Farside data.

Drivers of Withdrawal

The past month’s outflows have been driven by two key factors:
1. Heightened price volatility of bitcoin.
2. The unwinding of the basis trade.

Bitcoin has exhibited significant volatility this year, soaring to a record $109,000 in January following anticipation of a crypto-friendly regulatory environment under President Donald Trump, and plummeting to around $76,000 by early March amid concerns over tariffs.

Retail investors generally react to such volatility by selling, paralleling their emotional responses to other risk assets.

Basis Trade Unwinding

Institutions are also unwinding the basis — or cash-and-carry trade, which involves taking long positions in the ETF while simultaneously shorting CME bitcoin futures. A short position bets on a price drop, creating a delta neutral trade that exploits the premium of futures pricing over spot prices.

Currently, this arbitrage is yielding only about 2%, one of the lowest since the ETFs were approved. Meanwhile, U.S. Treasury yields are attracting investors seeking safer alternatives.

Market Signals

Cash flow in and out of ETFs often indicates market trends. Aggressive outflows usually correlate with local price bottoms in bitcoin, particularly when analyzed over a 30-day moving average. This trend was evident when bitcoin reached its low in March and has been observed during similar declines in August 2024 and April 2024.