Crypto Sell-Off Wipes Out $517M in Bitcoin ETFs – What’s Next for BTC Price?

Bitcoin is bleeding, and the market is on edge. Prices have plunged to $89,000, and with investors pulling out, there’s little sign of relief. The once-booming rally that pushed Bitcoin past $108K in January now feels like a distant memory.

ETF outflows are surging, hedge funds are scrambling to exit, and market fears are growing. Could this be the start of an even deeper crash? Some analysts warn that Bitcoin could sink to $70,000 – and the reasons behind it might surprise you.

Here’s what’s driving the sell-off and why the next few days could be critical for Bitcoin’s future.

$517 Million Pulled From Bitcoin ETFs in a Week

Since hitting $108K in January, Bitcoin has been on a steady decline. On February 24, U.S. spot Bitcoin ETFs recorded $517 million in outflows—the highest in seven weeks. This marked the fifth consecutive day of withdrawals, with major funds seeing large exits:

• BlackRock’s iShares Bitcoin Trust (IBIT): -$159 million
• Fidelity’s Wise Origin Bitcoin Fund: -$247 million
• Bitwise, Invesco, and Grayscale: Significant outflows

These sell-offs dragged Bitcoin down over 5%, first to $91K, then further to $89,175, with a 2.25% drop in the last hour.

Trump’s Tariff Policy Sparks Fears

Arthur Hayes, co-founder of BitMEX, warns that Bitcoin could fall to $70,000, blaming recent U.S. tariff policy changes under Donald Trump. Hedge funds are now unwinding their positions, adding to the market’s weakness.

Many hedge funds had been using a “basis trade” strategy—buying Bitcoin ETFs while shorting Bitcoin futures on the Chicago Mercantile Exchange (CME) to profit from price differences. But as Bitcoin’s price drops, this strategy becomes less profitable, forcing funds to exit by selling ETF shares and buying back their CME futures positions.

Hedge Funds Exiting Could Trigger a Chain Reaction

Hayes warns that mass hedge fund liquidations could cause a chain reaction—as more funds exit, Bitcoin’s price could spiral lower.

Markus Thielen from 10x Research agrees, noting that Bitcoin’s recent gains were driven more by hedge fund trading rather than long-term investors. Now that these funds are pulling out, Bitcoin is struggling to find new buyers. If the futures premium continues to fall, more hedge funds may be forced to sell their ETFs, driving prices down even further.

Can New ETF Approvals Save Bitcoin?

Bitcoin surged past $100K after Trump’s election victory boosted hopes for a Bitcoin strategic reserve. But now, with ETF investors retreating and hedge funds selling off, Bitcoin is struggling to stay strong.

The market is hoping for new ETF approvals to bring fresh capital and stop the decline. The SEC has shown interest in more Bitcoin ETFs, and a new round of approvals could help stabilize Bitcoin.

The big question now: Will Bitcoin recover, or is Hayes’ $70K prediction about to come true? The coming weeks will be crucial for the market’s next move.

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