The crypto market “enters winter”! Bitcoin spot ETF redeemed more than 4.5 billion US dollars in February, creating the worst wave of capital withdrawals since launch

The Zhitong Finance App noticed that a Bitcoin spot ETF listed in the US recorded the largest capital outflow in history between November and December. This highlights a sharp shift in investor sentiment as cryptocurrency prices retreated from recent all-time highs.

According to industry data, the Bitcoin Spot ETF recorded a total net redemption of US$4.57 billion over this two-month period, the largest divestment since the product was launched in January 2024. Most of the selling pressure was felt in November, with a total capital outflow of US$3.48 billion, followed by another outflow of US$1.09 billion in December.

The drastic redemption coincided with a sharp drop in the price of Bitcoin. During November and December, the price of Bitcoin fell by about 20%, slipping from around $10,9554 to around $89,422. This widespread pullback began early in the fourth quarter. Prior to that, the digital currency reached a record high of $126,272 on October 6, then the upward momentum began to subside.

Ethereum-related products are facing similar headwinds. The Ethereum Spot ETF recorded a net outflow of around $20 billion over the same two-month window, reflecting the general weakness of the digital asset market, not just Bitcoin.

Record capital outflows have highlighted how quickly inflows into crypto-related investment products can be reversed in times of increased volatility, as investors reassess their risk exposure as prices fall and market conditions change.