TL;DR:
Outflow total: Bitcoin ETFs saw $1.16 billion in net outflows over three trading days, with Tuesday’s $116 million marking a slowdown from prior sessions.
Bitwise’s view: Head of research André Dragosch says the pullback reflects a short-term risk-off mood, not a structural shift, citing survey data showing institutions held positions.
Custody concerns: The Binance hack sparked questions about ETF custody, but Dragosch notes institutional funds use cold storage at Coinbase, unlike exchange hot wallets.
Bitcoin ETFs recorded more than $1 billion in net outflows over three trading days . Still, crypto asset manager Bitwise says the withdrawals do not signal a lasting retreat by institutional investors. Investors pulled another $116 million from the funds on Tuesday , bringing net outflows since Friday to $1.16 billion, according to SoSoValue data.
Bitwise Says Outflows Reflect Short-Term Risk-Off Sentiment
“I do think it’s related to a short-term risk-off environment rather than a structural change in institutional sentiment,” according to Bitwise’s head of research, André Dragosch. The withdrawals followed Binance’s $6.3 billion hack on Thursday, which raised concerns about investor confidence and the security of ETF custody. Dragosch attributed the outflows to weaker market sentiment rather than fears over the safety of ETF holdings.
He said Bitcoin ETFs flows reflect both long-term institutional adoption and shorter-term changes in investor sentiment . He cited a recent Bitwise survey of 15 institutions, none of which had reduced their Bitcoin ETFs exposure during the bear market. US regulatory filings also showed that most institutional investor categories, apart from hedge funds, had largely maintained their positions.
Retail Investors Drive Volatility as Outflows Slow
Retail investors still account for the majority of Bitcoin ETFs holdings and tend to react more strongly to market volatility , according to Dragosch. Bitwise’s analysis found that Bitcoin ETFs inflows are closely tracked by broader crypto market sentiment, which weakened around the Binance hack, he said. Tuesday’s $116 million in outflows marked a slowdown from Monday’s $399 million and Friday’s $643 million , extending the funds’ withdrawal streak to three trading sessions.
The Crypto Fear & Greed Index rose to 34 from 26 on Monday , though it remained in the “Fear” category. Bitcoin gained about 2% over the past 24 hours, to trade near $78,000 at publication, according to CoinGecko . The latest withdrawals brought the funds’ net outflows for 2026 to approximately $153 million. The Binance hack has raised concerns among some industry observers about crypto ETFs custody , particularly because major funds rely on a small number of custodians.
Dragosch pointed to differences between the security arrangements used by crypto exchanges and institutional custodians , noting that the Binance incident affected hot wallets, which are connected to the internet, rather than cold wallets. “ In contrast, institutional funds held at Coinbase custody are custodied in cold storage, which, by definition, are not connected to the internet,” Dragosch said.
