US Bitcoin ETFs See $1.16 Billion in Outflows Following Binance Hack

Bitcoin ETFs face three-day withdrawal streak

United States spot Bitcoin exchange-traded funds (ETFs) lost more than $1.16 billion over three trading days. An ETF is a financial product that allows people to invest in an asset like Bitcoin without having to buy and store the cryptocurrency themselves.

The outflows began on Friday and continued through Tuesday. Despite the large withdrawals, crypto asset manager Bitwise suggests the trend does not represent a long-term exit by major institutional investors.

Key figures from the market

• Total net outflows over three days reached $1.16 billion.
• Investors withdrew $116 million on Tuesday, $399 million on Monday, and $643 million on Friday.
• The net outflows for the year 2026 have reached approximately $153 million.
• Bitcoin was trading near $78,000 at the time of the report.

Bitwise analyst explains market sentiment

André Dragosch, the head of research at Bitwise, stated that the selling is likely related to a short-term "risk-off" environment. This means investors are moving money out of assets they perceive as risky due to current market conditions.

Dragosch noted that ETF flows often follow general market sentiment. Sentiment weakened following a $6.3 billion hack of the Binance exchange on Thursday. However, he believes this is a temporary reaction rather than a permanent change in how institutions view Bitcoin.

Institutional investors maintain positions

According to Bitwise, institutional investors have mostly kept their Bitcoin ETF holdings despite the recent market volatility. A survey of 15 institutions found that none had reduced their exposure during the current bear market.

Regulatory filings show that most institutional categories, with the exception of hedge funds, have maintained their positions. Retail investors, who are individual rather than professional investors, still hold the majority of Bitcoin ETFs and are typically more sensitive to price changes.

Security differences in crypto storage

The Binance hack raised concerns about the safety of crypto ETFs. Dragosch explained that there is a major difference between exchange security and institutional ETF custody. The Binance hack affected "hot wallets," which are digital wallets connected to the internet.

In contrast, institutional funds are typically kept in "cold storage." This means the Bitcoin is held in wallets that are not connected to the internet, making them less vulnerable to online hacks.

Why the recent outflows matter

The recent withdrawals show how sensitive the crypto market remains to security events. The Crypto Fear & Greed Index, which measures market emotions, remained in the "Fear" category following the hack. While Bitcoin's price showed a small recovery on Tuesday, the large outflows from ETFs suggest that many investors remain cautious.

Sources

• Cointelegraph

Read also: Nasdaq approves listing of Canary's staked Injective ETF