Bitcoin cs price is sluggish again because of Crypto ETP

Bittime - The cryptocurrency market is experiencing significant volatility as investors quickly withdraw funds from crypto exchange-traded products (ETPs). 

This mass exodus signals increasing caution among institutional players, influenced by regulatory concerns, macroeconomic pressures and recent security breaches. 

Bitcoin, the largest digital asset, was hit the hardest, while some altcoins showed unexpected resilience, hinting at a possible shift in market sentiment.

Crypto ETPs Experience Massive Outflows

The crypto market is facing new turmoil as investors withdraw billions from crypto ETPs. According to CoinShares' latest report, digital asset investment products recorded an outflow of $2.9 billion in the past week, marking the largest weekly withdrawal record ever. 

The trend extended a three-week streak of outflows, with total withdrawals reaching $3.8 billion.

Investor sentiment has been shaken by a variety of factors, including macroeconomic uncertainty, regulatory concerns and recent security incidents. 

While Bitcoin took the brunt of the blow, several alternative assets are attracting investor interest, indicating a possible shift in market dynamics.

Read also: Bitcoin Price Prediction Today March 4

Bitcoin Suffers Biggest Losses

Bitcoin experienced the biggest drop, with outflows reaching $2.59 billion in the past week. 

Analysts attributed the heavy selling to profit-taking after a long rally, coupled with growing concerns about central bank policy.

Interestingly, Bitcoin short ETP recorded inflows of $2.3 million, reflecting increasing bearish bets on this leading crypto asset. Ethereum was also impacted, with outflows of $300 million—the largest weekly drop in its history.

Bitcoin prices plunged sharply after record ETP outflows, hitting a four-month low of $78,197 on February 28. This marks a 27% decline from its all-time high above $109,000.

However, Bitcoin quickly recovered, surging $10,000 in a single day to trade around $93,000. The recovery was driven by renewed speculation regarding US government-backed crypto reserves, which former President Donald Trump reportedly alluded to.

Some Altcoins Show Resilience

While most major assets experienced declines, some altcoins showed resilience.

• Solana (SUN) experienced outflows of $7.4 million, while Toncoin (TON) recorded withdrawals of $22.6 million.
• Sui (SUI) became the only major crypto ETP to experience strong inflows, attracting $15.5 million.
• XRP based ETP followed with inflows of $5 million, indicating selective investor confidence amid the broader market sell-off.

This trend shows that even though investors are pulling back from flagship cryptocurrencies, some remain optimistic about niche digital assets with strong use cases.

Read also: XRP Price Prediction Today March 4

Regional Trends and Institutional Reallocation

The United States led outflows among crypto ETP asset managers, with withdrawals of $2.87 billion. Several other regions also experienced similar things:

• Switzerland recorded an outflow of $73 million.
• Canada experienced a decrease of $16.9 million.
• Germany was an exception, recording $55 million in inflows, indicating that some investors saw the dip as a buying opportunity.

Despite the large outflows, total assets under management (AUM) in crypto ETPs remained significant at $138.82 billion, although down from a peak of $173 billion earlier this year.

Conclusion

The massive outflow from crypto ETPs highlights a shift in investor sentiment, driven by macroeconomic concerns and security risks. 

Although Bitcoin and Ethereum are facing major drawdowns, selective interest in altcoins suggests a more mixed market outlook. 

As institutional positions readjust, upcoming economic indicators and regulatory developments will likely shape the next phase of the cryptocurrency movement

FAQ

What's that  Crypto ETP?

Crypto ETP (Exchange-Traded Product) is an exchange-traded investment product that reflects the price of a particular crypto asset. Examples include ETFs (Exchange-Traded Funds) and ETNs (Exchange-Traded Notes). 

ETPs allow investors to gain exposure to digital assets without having to directly purchase them, making them more accessible to institutions and individuals who wish to invest in crypto through a regulated mechanism.

Why are investors withdrawing funds from crypto ETPs in large amounts?

Investors withdrew funds due to a combination of factors, including macroeconomic uncertainty, tight monetary policies from central banks, and security concerns such as the $1.4 billion hack of Bybit. Additionally, profit-taking after a long rally also contributed to the large outflow.

Are all crypto assets experiencing outflows from ETPs, or are some experiencing inflows?

Not all assets experience outflows. Although Bitcoin and Ethereum recorded large outflows, some altcoins such as Sui (SUI) and XRP-based ETP actually experienced inflows. This shows that some investors are still looking for opportunities in certain crypto assets which are considered to have better potential amidst market uncertainty.

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Also, visit the Bittime Blog for interesting updates and educational information about the crypto world. Find reliable articles about Web3, blockchain technology, and digital asset investment tips designed to enrich your crypto knowledge.

Reference 

Jimmy Aki, Bitcoin Bleeds the Most as Crypto ETPs Record Largest Weekly Outflows of $2.9 Billion: CoinShares, accessed March 4, 2025.

Author: SD