Bitcoin ETFs are bleeding cash like there's a fire sale elsewhere.

Over $1.1 billion has fled these funds since February 6th, making this the worst month since their launch last year.

The exodus has continued for a third straight week with no signs of slowing down.

Market Disconnect

Meanwhile, traditional markets are having the time of their lives.

The S&P 500 and gold are hitting fresh all-time highs, while Bitcoin has been stuck well below $100K, having recently plunged below $90K for the first time this year. 

BTC is struggling to keep its head above support as it’s now sporting a solid 20%+ discount from its Trump inauguration day peak of $108,786.

The usual "digital gold" narrative isn't playing out when actual gold is outperforming crypto.

Why The Cold Feet?

Investors are getting spooked by a perfect storm of uncertainties.

US-China trade tensions are ramping up, making everyone a bit more risk-averse.

The Fed's next moves on interest rates remain cloudy, keeping institutions cautious about speculative assets.

And that massive $1.4 billion Bybit hack didn't exactly boost confidence in the crypto ecosystem, even if they've reportedly recovered most funds.

Grayscale's GBTC can't catch a break either, bleeding another $60.08 million on February 21 alone.

Bitwise's BITB and Fidelity's FBTC joined the exodus, losing $16.58 million and $12.47 million respectively.

Even market leader BlackRock's IBIT saw $112 million walk out the door on February 20, though it bounced back with $21.64 million in inflows the next day.

VanEck's HODL managed to stay positive with a modest $4.71 million gain – apparently someone out there is still true to the name.

It’s Not All Bad For The ETFs

Despite these outflows, the long-term picture for Bitcoin looks more solid than ever before. 

Marcin Kazmierczak from RedStone points out that net flows remain overwhelmingly positive since launch.

Major players like Abu Dhabi's Sovereign Wealth Fund and Wisconsin's Pension Fund are still holding massive BTC positions through these ETFs.

And Michael Saylor just casually dropped another $2 billion to buy 20,356 more Bitcoin, bringing Strategy's stash to nearly 500,000 coins worth over $47 billion.

However, those hoping for a government-fueled rally might need to temper expectations, as Polymarket bettors now give just a 10% chance that Trump will create that strategic Bitcoin reserve during his first 100 days.

The "Make Bitcoin Great Again" crowd might need to wait a bit longer for those policy catalysts they've been dreaming about.

Keep The Dream Alive 

ETF flows are just one piece of the Bitcoin puzzle, and short-term movements don't always predict long-term trends.

The market is clearly taking a breather while sorting through geopolitical and monetary uncertainties.

And hey, Bitcoin maximalists will still say, "this is good for Bitcoin," – no matter which way the price moves.