The decline in Bitcoin (BTC) spot exchange-traded funds (ETFs) continues unabated, marking a fourth consecutive month of net outflows as BTC approaches its fifth negative monthly close in February. This trend is evident in the shrinking fund balances and the increasingly bearish rolling net flow data, which stand in stark contrast to the performance of competing asset ETFs.
Since October 2025, the net assets held in U.S. spot Bitcoin ETFs have plummeted from a peak of nearly $170 billion to $84.3 billion. The cumulative net inflows have dropped to around $54 billion from the all-time high of $63 billion. Since July 2025, cumulative net flows have totaled just $5 billion, highlighting a significant slowdown in capital inflows.
ETF Outflows Intensify
Bitcoin researcher Axel Adler Jr. tracked the ETF outflows between February 12 and February 19, noting a total of 11,042 BTC in net outflows. The largest single-day reduction occurred on February 12, with 6,120 BTC (approximately $416 million) leaving the funds. Back-to-back outflows of 1,520 and 1,980 BTC were recorded on February 17 and 18, respectively. Only two sessions saw positive inflows, with the February 6 session adding 5,900 BTC to the funds.
Adler emphasized that three consecutive positive sessions are necessary to confirm renewed accumulation in the ETFs. Until then, the outflows continue to act as a source of supply for the market.
Macroeconomic Trends Align
The macroeconomic data align with the cooling trend in Bitcoin ETFs. Since November 2025, the ETFs have shed about 87,000 BTC, including approximately 15,000 BTC in February. The total ETF balances now stand at around 1.26 million BTC, down from the peak of 1.36 million BTC.
The selling pressure from the largest BTC funds has been measured. BlackRock’s IBIT holdings have declined to 759,000 BTC from 806,000 BTC, a 6% reduction. Fidelity’s FBTC holdings have dropped to 186,000 BTC from 213,000 BTC, a 12.6% decline. Despite this, Bitcoin’s price has fallen more sharply than the ETF balances, indicating that the spot market demand is insufficient to fully absorb the broader market pressure.
Gold ETFs Steal the Spotlight
Over the past two years, the leadership between Bitcoin and gold ETFs has rotated based on 90-day rolling flows. Bitcoin’s 90-day inflows peaked near $16 billion in March 2024, cooled to $3 to $4 billion between June and October, and then surged to $21.6 billion in December 2024.
Gold ETFs, on the other hand, saw negative flows until July 2024, but then accelerated to $30 billion by April 2025. During March and April 2025, Bitcoin’s 90-day flows slipped to negative $2 billion. Gold peaked again at $36 billion in October 2025, while Bitcoin inflows faded into the final quarter. In January 2026, gold flows reached $29 billion before easing to $21 billion by mid-February, as Bitcoin flows remained in negative territory.
The data show a repeated handoff between the two assets. The periods of weakening Bitcoin ETF demand have aligned with surges in gold inflows, particularly between March and October 2025. In relative terms, gold ETFs have captured incremental capital as investors favor the asset with smaller price swings and a longer track record during risk-off phases.
Market Conditions and Future Outlook
ITC Crypto founder Benjamin Cowen classifies the first quarter of 2026 as a “late-cycle restrictive digestion” phase for both equities and the crypto markets. The U.S. Federal Reserve ended quantitative tightening in December 2025, halting the balance sheet runoff, but the monetary policy remains restrictive relative to market growth expectations. The federal funds rate still sits above the 2-year Treasury yield, while the 10-year yield trades near 4.1% and the 10-year real yield holds around 1.7%–1.8%, keeping financial conditions tight.
The positive real yields mean that investors can earn inflation-adjusted returns in the fixed income markets, raising the opportunity cost of holding non-yielding assets like Bitcoin. Historically, durable ETF inflows have followed falling real yields or a clear easing cycle. Neither condition has developed yet, which may explain the slowdown in demand for Bitcoin ETFs since October 2025.
Looking ahead, the continued restrictive monetary environment and the ongoing preference for gold ETFs suggest that Bitcoin ETFs may face further challenges in the near term. However, any significant shift in macroeconomic conditions or investor sentiment could reverse this trend, potentially reigniting interest in Bitcoin ETFs.
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