Bitcoin ETFs retain 95% of capital despite declining inflows, says Bloomberg analyst

Bitcoin exchange-traded funds have held onto over 95% of their invested capital, even as inflows slow and Bitcoin’s price declines, according to senior Bloomberg ETF analyst James Seyffart.

In a Mar. 14 post on X, Seyffart shared that Bitcoin ETFs have registered declining inflows, dropping to $35 billion from a peak of $40 billion. However, with total assets under management at $115 billion, most funds remain intact despite Bitcoin’s 25% price drop.

According to Seyffart, this resilience is comparable to traditional U.S. stock ETFs, where long-term investors don’t panic sell during market downturns but instead keep buying. This investor behavior, he said, indicates a move away from short-term speculation and toward long-term wealth-building tactics.

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* pic.twitter.com/8OtH6NM33g

— Eric Balchunas (@EricBalchunas) March 13, 2025

Meanwhile, data from SoSoValue shows that U.S. spot Bitcoin ETFs have seen $870 million in outflows in the last week and $1.6 billion over the past month. Analysts say the recent outflows are a classic case of “buy the rumor, sell the news.”

The Strategic Bitcoin Reserve initiative was first mentioned by Trump in July 2024, which led to speculations and more investors buying Bitcoin. By the time the official announcement was made at the Crypto Summit, the market had already priced it in, leading to a sell-off.

You might also like: Texas introduces second Bitcoin reserve bill to allow $250M investment

Other indicators suggest Bitcoin’s market is weakening. CryptoQuant contributor Darkfost noted that Bitcoin demand has fallen sharply since December. He pointed to a drop in the 30-day simple moving average of apparent demand, which compares new supply to BTC inactive for over a year. This decline indicates fewer active buyers and a more cautious market.

https://twitter.com/darkfost_coc/status/1900253428846387242?s=46&t=nznXkss3debX8JIhNzHmzw

Another concerning trend was revealed by the data analytics platform Alphractal on a Mar. 12 X post. The Bitcoin Sharpe Ratio, which determines risk-adjusted returns, has been declining since March 2024. Even as Bitcoin hit all-time highs above $100,000, the ratio showed weakness, indicating rising risk per unit of return.

The decline can be attributed to macroeconomic uncertainty, increased volatility, and slowing short-term returns. Returns become less predictable and more volatile when the Sharpe Ratio declines, indicating increased market volatility and possible price corrections.

Additionally, Santiment’s data indicates that large Bitcoin holders are selling. In the past week, whale wallets, or those with 100-1,000 BTC, sold over 50,000 BTC totaling approximately $4.07 billion. Changes in whale and shark wallet tiers have historically affected market trends, raising more questions about the short-term prospects of Bitcoin.

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

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