38 billion withdrawn, should you sell your Bitcoin ETF?

On February 23, 2026, a set of data circulated in the crypto community: Over the past five weeks, the U.S. spot Bitcoin ETF has experienced a total net outflow of about $3.8 billion, marking the longest continuous outflow period since February 2025. Among them, BlackRock’s IBIT product alone saw an outflow of $2.13 billion, accounting for more than half. What does this number mean? Since its launch, the total net inflow of spot Bitcoin ETFs has still reached $54 billion, with a total net asset size of about $85.3 billion, representing 6.3% of Bitcoin’s total market cap. The $3.8 billion outflow is equivalent to pulling out 7% of the accumulated funds. If you are holding IBIT or other Bitcoin ETFs, your first reaction to this news might be: institutions are fleeing, should I also run? Is this $3.8 billion a sign that institutions are completely exiting, or just a temporary rebalancing of positions?

Source: Coindesk

Where did the money go, who is fleeing

From the data, funds haven’t completely left the crypto market but are reallocating. During the same period, spot Ethereum ETFs also experienced five consecutive weeks of net outflows, with about $123 million flowing out in the most recent week. Bitcoin and Ethereum products are under pressure simultaneously, indicating that the withdrawal of funds is more about a general reduction in digital asset allocations rather than issues with a single asset. Interestingly, during the same period, gold and gold ETFs attracted about $16 billion in inflows. This suggests that a large portion of the money withdrawn from Bitcoin ETFs is flowing into traditional safe-haven assets. Institutional investors are doing one thing: reducing risk exposure and shifting money from highly volatile crypto assets to safer havens. Who is fleeing? The data points to institutions. CryptoQuant’s “Exchange Whale Ratio” has risen to 0.64, a new high since 2015. This number indicates that nearly two-thirds of the Bitcoin inflows into exchanges come from the top ten large holders. The recent decline and outflows are driven not by panicked retail investors but by large funds acting proactively.

Is the October crash really the culprit?

The news attributes the outflows to “continued risk aversion among institutions after the October crash last year,” but this explanation is only half correct. On October 10 last year, Bitcoin experienced a massive liquidation, with prices quickly dropping from a high level, which indeed shook institutional confidence. But that was over four months ago. If it were just the aftermath of October’s crash, why are outflows still ongoing? The real reason is the stacking of three macro pressures. First, geopolitics: tensions between Iran and the U.S. continue to escalate, putting global risk assets under pressure, not just Bitcoin. Second, trade policies: on February 22, Trump announced an increase in global tariffs from 10% to 15%, which took effect on February 24. Higher tariffs mean rising inflation pressures, weakening expectations of Fed rate cuts, and tightening liquidity—all negative for risk assets. Third, technical factors: data shows that the average cost basis for Bitcoin ETF investors is around $80,000, while Bitcoin is hovering near $65,000, meaning most ETF investors are in a loss position. When prices are below the cost basis, the MVRV indicator has fallen below 1, indicating that this group is generally in loss. Historically, such situations tend to intensify selling pressure because investors tend to sell to cut losses when prices rebound near their cost basis.

How is this different from the five-week outflow in February last year?

The article mentions that there was also a five-week outflow in February last year, with $5 billion flowing out, after which Bitcoin dropped to $75,000. This time, $3.8 billion flowed out—less than last time—but there’s a key difference: last time, Bitcoin was still at a high level, and after dropping to $75,000, it rebounded. This time, Bitcoin is already at around $65,000, lower than the previous low. This indicates that the market bottom is moving downward. But it’s not all bad news; market insiders believe that this round of fund outflows mainly reflects institutional risk reduction and position rebalancing rather than a structural abandonment of crypto assets. In plain language: institutions are not quitting altogether; they’re just temporarily stepping back, waiting for the storm to pass before returning.

The last line of defense at $60,000

Everyone is now watching a number: $60,000. Orbit Markets analysts say the crypto market remains fragile, and participants are hoping for support at $60,000. If Bitcoin clearly falls below $65,000, then $60,000 will come into focus; on the upside, bulls need the price to reach $70,000 to reverse the market narrative. Why is $60,000 so important? From a technical perspective, $60,000 is a heavily traded zone with multiple support and resistance points, with many chips changing hands here. Psychologically, it’s a round number; breaking below could shift market sentiment from “a correction” to “a trend reversal.” From a liquidity perspective, many leveraged positions have risk control lines set at this level, and once triggered, they could cause a chain reaction of selling. If $60,000 cannot hold, the next target could be $55,000.

What should you do with your ETF?

Back to the initial question: should you sell your IBIT or other Bitcoin ETFs? First, know who you are trading with. The main force behind this outflow is institutions—they are adjusting positions driven by macro factors, not panic selling. This means if you sell now, you might be following right behind them. Second, consider your historical position. Since the product launched, the total net inflow of spot Bitcoin ETFs has been $54 billion, with total assets of $85.3 billion. The $3.8 billion outflow has hurt, but it’s not the end; as long as the inflow base remains, there’s a chance for recovery. Third, keep an eye on the Fed. Industry experts believe that if U.S. macro data weakens and market expectations of rate cuts strengthen, digital asset ETFs could see a capital inflow; until then, institutional funds tend to control risk exposure. In other words, when rate cut expectations rise, money will come back. Finally, set an observation point for yourself. If holding your ETF keeps you awake at night, your position is too heavy—reduce it to a level where you can sleep. If you decide to hold steady, then watch $60,000. That’s the door; on this side is volatility, on the other side is the unknown. If volume breaks below $60,000, consider whether to reduce your holdings. Until then, every panic in the market could be the start of the next rally.

Conclusion

At 00:01 on February 24, Trump’s new tariffs took effect. No one can predict exactly how the market will move by then. But one thing is certain: the $3.8 billion outflow is not the end of the crypto story. It’s just a painful phase that this asset class must go through as it transitions from “retail frenzy” to “institutional allocation.” The cumulative net inflow of Bitcoin ETFs still stands at $54 billion, with total assets of $85.3 billion. These numbers won’t disappear because of five weeks of outflows. When you see headlines about “Bitcoin ETF bleeding,” remember—it’s not blood, it’s money. Money flows out, and money flows back in. The real concern isn’t how much your ETF has fallen today, but whether you understand why it fell and whether it can recover afterward.