Bitcoin ETF Resilience Amid Price Decline

Bitcoin exchange-traded funds (ETFs) have maintained over 95% of their invested capital despite slowing inflows and a decline in Bitcoin’s price, as stated by senior Bloomberg ETF analyst James Seyffart.

In a post on March 14, Seyffart noted that Bitcoin ETF inflows had decreased from a peak of $40 billion to $35 billion. However, the total assets under management remain robust at $115 billion, indicating that most funds have held strong despite a 25% price drop.

Seyffart compared this resilience to traditional U.S. stock ETFs, highlighting that long-term investors tend not to panic sell in downturns, opting instead for continued investment. This behavior signifies a shift towards more substantial, long-term wealth-building strategies rather than short-term speculation.

> Nice @JSeyff chart of Bitcoin ETF inflows which are down to $35b (from peak of $40b). Based on $115b of AUM that means more than 95% of inv cash has held strong despite painful 25% decline = the Boomers are showing y’all how it’s done.. ducks
> — Eric Balchunas (@EricBalchunas) March 13, 2025

Meanwhile, data from SoSoValue indicates that U.S. spot Bitcoin ETFs experienced $870 million in outflows over the last week and $1.6 billion in the month. Analysts attribute these recent outflows to the “buy the rumor, sell the news” trend.

The Strategic Bitcoin Reserve initiative, first mentioned by Trump in July 2024, spurred investor interest in Bitcoin. However, the market had already accounted for the official announcement made at the Crypto Summit, leading to a sell-off.

Other indicators point to weakening Bitcoin demand. CryptoQuant’s contributor Darkfost observed a significant drop since December, noting declines in the 30-day simple moving average, which reflects new supply versus BTC that has been inactive for over a year. This suggests fewer active buyers and a cautious market.

Furthermore, Alphractal revealed a concerning trend in a post on March 12, stating that the Bitcoin Sharpe Ratio—which assesses risk-adjusted returns—has been declining since March 2024. Even as Bitcoin peaked above $100,000, the ratio’s weakness indicated heightened risk per unit of return.

The declining Sharpe Ratio can be linked to macroeconomic uncertainty, increased volatility, and slower short-term returns, making predictions of returns less reliable and more unpredictable.

Additionally, data reveals that large Bitcoin holders, referred to as whales, are selling off their holdings. In the past week, wallets containing 100-1,000 BTC sold over 50,000 BTC, amounting to around $4.07 billion. Changes among whale and shark wallet tiers have historically impacted market trends, raising concerns about Bitcoin’s short-term outlook.

Read more: Bitcoin volatility rises after Trump’s Bitcoin Reserve and options expiry