Massive $370M Bitcoin ETF Outflows: Investors Panic as Market Sentiment Sours! What This Means for BTC’s Future

Bitcoin ETFs dropped sharply on Friday as investors pulled funds, disappointed by Trump’s strategic Bitcoin reserve plan. The executive order acknowledged crypto’s global financial role but lacked a direct Bitcoin purchase strategy. This omission left many in the industry divided. Some saw a path for institutional adoption, while others criticized the plan’s limited impact. Market data showed investors proceeding cautiously. 

Bitcoin ETFs in Freefall! Market Reacts to Trump’s Strategy

The exchange-traded funds for Bitcoin had a red Friday as they recorded $370 million of outflows. As reported by farside investors, this was a surprising reaction from the market as Trump introduced a strategic Bitcoin reserve. Trump’s Bitcoin reserve disappointed some traders as it did not include any plan to buy Bitcoin. As such, investors now anticipate no uptrends and are even worried about further declines, leading to Bitcoin ETF outflows. However, as the chief operating officer of Bitget Wallet, Alvin Kan, mentioned, this reserve helped acknowledge crypto’s role in global finance.

Trump’s executive order also started a digital asset stockpile for cryptocurrencies other than Bitcoin, which also attracted some criticism. This is because many believe that smaller altcoins and coins without foundations should not be in the United State’s reserve. Both the reserve and the stockpile initially only contain cryptocurrencies seized by the government. However, this executive order allows for budget-neutral strategies to add more BTC to the reserve. However, it is stated that these strategies should not create costs for the taxpayers. 

Crypto Leaders React: Disappointment and Hope

This invoked reactions from the top figures in the crypto industry. As mentioned, some were disappointed by the scope of Trump’s Bitcoin reserve. CEO of the interoperability protocol, Wanchain Temujin Louie, expressed his disappointment. He stated, “This limited scope fell short of market expectations and resulted in considerable disappointment.”. There are also people who believe this development is a good chance for crypto, nonetheless. Morningstar’s director of passive strategies mentioned that this creates the possibility of the government acquiring more BTC. 

Ryan Rasmussen, asset manager Bitwise’s head of research, also shared his opinion on the matter. He stated that traders should not have expected the US  government to buy all the Bitcoin. He believes that with Bitcoin’s increased legitimacy, more wealth managers, investment firms, and US states will invest in BTC. Furthermore, he stressed that there are no worries about the USA’s government selling Bitcoin and crashing the market.

Bitcoin Slumps as Whales Quietly Exit

The market’s reaction has been underwhelming, as the prices remained consolidated and in a slump. The market information from the USA’s biggest derivatives exchange, CME, presents a 2% decline in BTC’s forward curve. This leads to future contracts being expired on staggered dates. Futures are contracts that will put a selected date for positions to be bought or sold in the future. 

Graph 1- Provided by CryptoQuant, published on Tradingview, March 8, 2025

Based on Graph 1, even when Bitcoin was climbing in the last few days, whales started to exit their positions. As per Graph 1, this was done in low amounts each time so as not to crash the market. So, we can see that most large investors are not confident about the future rise in the price of BTC. Because of this, they have been offloading their investment and have used the smaller traders’ optimism for profits.

Institutional Adoption Offsets Market Uncertainty?

The crypto market may stay volatile as more updates and developments come about this reserve. However, Bitcoin’s legitimacy continues growing, which could attract institutional investors and offset losses. As officials clarify their long-term crypto stance, sentiment stabilizes, possibly starting the next uptrend. If the government keeps backing it and adoption expands, Bitcoin could regain momentum despite Bitcoin ETF outflows and current struggles.