Bitcoin ETFs Experience Massive Outflows Amid Price Decline

LiquidityWizard · 2026-01-31T01:15:05+00:00

Bitcoin spot ETFs are experiencing significant capital outflows, totaling $1.62 billion over four days, signaling a notable shift in institutional investor sentiment. Leading this trend is BlackRock, which has been reducing its holdings, while hedge funds are also decreasing their positions as Bitcoin prices hover around $84,060. The allure of Bitcoin is waning due to shrinking profit margins in basis trading, prompting institutional investors to seek out more attractive alternative cryptocurrencies such as XRP and Solana. This reallocation of capital reflects a strategic repositioning rather than a complete withdrawal from the cryptocurrency market.

LiquidityWizard

2026-01-31 01:15:05

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Exchange-traded funds tracking spot Bitcoin are experiencing significant capital reductions these days. Over a four-day period, outflows reached $1.62 billion, reflecting a notable shift in institutional investors’ perception. This trend intensifies as Bitcoin’s price remains below $90,000, currently hovering around $84,060 according to the latest market quotes.

BlackRock Outflows Lead the Retracement Trend

BlackRock’s iShares Bitcoin Trust has been a prominent player in this capital movement, according to data from NS3.AI. The world’s largest asset manager is leading the reductions in positions, a clear indicator of how major investors are readjusting their strategies in the current market environment. BlackRock is not the only institution adjusting its exposure; multiple hedge funds are systematically contracting their positions.

Basis Trading Yields Dilute Attractiveness

The main cause behind these massive outflows is the compression of profit margins. Bitcoin basis trading returns, a strategy that exploits differences between futures and spot markets, are approaching U.S. Treasury rate levels. When the potential returns of these operations become comparable to low-risk investments, the value proposition for maintaining large Bitcoin positions weakens considerably, prompting funds to seek more attractive alternatives.

Tactical Reorientation: Altcoins Gain Traction

Despite the wave of outflows characterizing the movement of large Bitcoin holders, it is not a total exodus from the cryptocurrency market. Institutions are making selective entries into alternative assets, particularly XRP, which is currently trading at $1.74, and Solana, priced at $117.61. This behavior demonstrates that large institutions are implementing a strategic repositioning rather than a complete retreat from the crypto space.

The selection of these altcoins suggests that institutional investors are seeking exposure to projects with stronger growth narratives or better performance prospects in the next phase of the market cycle. This capital mobilization represents a deliberate tactical shift rather than a widespread disillusionment with digital assets.

BTC-5,29%

XRP-1,77%

SOL-8,64%

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