Bitcoin’s short phase as a war hedge seems to be fading as institutional investors move from heavy buying to taking profits. After the U.S.–Israel strikes on Iran, Bitcoin [BTC] quickly recovered from its slump, where it had reached to $63,000.
This recovery was supported by strong institutional demand, with more than $1.14 billion flowing into spot Bitcoin ETFs between the 2nd and 4th of March.
Bitcoin ETF analysis
During this period, BlackRock’s IBIT led the inflows, attracting $892.2 million, including a single-day inflow of $306.6 million on the 4th of March. This helped Bitcoin [BTC] recover toward the $72,000 level.
However, the bullish momentum started to weaken on the 5th of March when the ETF sector recorded $227.9 million in net outflows.
The selling pressure increased further on the 6th of March, with total outflows reaching $348.9 million. Fidelity’s FBTC saw the largest withdrawal at $158.5 million, while BlackRock also recorded a rare outflow of $143.5 million.
Execs weigh in
Remarking on the same, Jacob King, CEO and Founder of SwanDesk, noted,
“We’re witnessing the complete collapse of Bitcoin ETFs, which were once the most talked-about topic.”
King further added,
“What goes up must come down. Investors are realizing the mirage around Bitcoin is over.”
While Bitcoin’s volatility dominated the headlines, the broader altcoin ETF market showed a similar rise-and-fall pattern, pointing to a wider slowdown in investor risk appetite.
Ethereum ETF sees mixed sentiment
Ethereum [ETH], in particular, experienced a sharp shift.
On the 4th of March, Ethereum ETFs saw strong demand, attracting $169.4 million in inflows, supported by a rare $59.5 million investment into Grayscale’s ETH product. However, the momentum quickly faded.
Fidelity’s FETH became a major source of outflows, recording $115 million leaving the fund on the 5th of March and another $67.6 million on the 6th of March.
Blockchain analytics firm Arkham also pointed out this shift and noted,
Source: Arkham/X
Solana and XRP ETF paints a different picture
The slowdown was also visible in other major altcoins like Solana [SOL] and Ripple [XRP]. Solana’s earlier inflow streak ended on the 5th of March after $6 million exited Fidelity’s FSOL, contributing to a total sector outflow of $8.6 million by the 6th of March.
XRP ETFs also showed weakness. After days of steady inflows, the asset recorded $22.77 million in combined outflows over the last two days of the week.
Source: SoSo Value
This comes alongside a broader institutional expansion into crypto, driven by new products and improving infrastructure.
What’s more?
One major development came when 21Shares also launched the first U.S. Spot Polkadot ETF, trading under the ticker TDOT. This product allows investors to track the price of Polkadot without directly holding the token.
At the same time, traditional financial institutions are also strengthening their crypto presence. Morgan Stanley filed an updated S-1 registration for its Bitcoin Trust, showing its continued commitment to the sector.
Together, these moves suggest that while markets may currently be seeing short-term caution, institutions are steadily building the infrastructure needed for a much larger multi-asset crypto investment market in the future.
Final Summary
- While Bitcoin ETFs saw strong inflows earlier in the week, the sudden reversal highlights growing caution among institutional investors.
- Outflows across Ethereum, Solana, and XRP show that institutional caution extends beyond BTC.
