Spot Bitcoin exchange-traded funds (ETFs) in the United States experienced a sharp increase in net outflows, nearly doubling as investor sentiment soured following concerns about U.S. President Donald Trump’s proposed crypto reserve initiative.
Rising Outflows Amid Market Skepticism
According to data from SoSoValue, the 12 Bitcoin ETFs recorded net outflows of $143.43 million on March 4—almost double the previous day’s net inflows of $74.19 million. The substantial shift in investor behavior comes as market experts express reservations over the feasibility and implications of Trump’s U.S. Crypto Strategic Reserve plan.
Leading the exodus, Fidelity’s FBTC saw outflows of $46.08 million, while ARK 21Shares’ ARKB followed closely with $43.92 million in net redemptions. Franklin Templeton’s EZBC recorded a withdrawal of $35.71 million. Other notable contributors to the negative trend included Bitwise’s BITB, which lost $23.96 million, Invesco Galaxy’s BTCO with $16.47 million in outflows, and WisdomTree’s BTCW, which saw redemptions totaling $13.07 million.
Grayscale’s mini Bitcoin Trust was the sole exception, recording a net inflow of $35.77 million, offering slight relief against the broader outflow trend. The remaining five Bitcoin ETFs saw no significant inflows or outflows for the day.
Ethereum ETFs Return to Positive Flow
While Bitcoin ETFs struggled, Ethereum ETFs saw a reversal of fortunes, registering net inflows of $14.58 million on March 4 after experiencing eight consecutive days of outflows. Fidelity’s FETH led the charge, attracting $21.67 million in inflows, followed by Grayscale’s ETHE and its mini Bitcoin Trust funds, which pulled in $10.71 million and $8.46 million, respectively. However, BlackRock’s IBIT stood as an outlier, registering a net outflow of $26.27 million. Five other Ethereum ETFs remained neutral on the day.
Trump’s Crypto Reserve Plan Faces Scrutiny
The sharp increase in Bitcoin ETF outflows aligns with market reactions to Trump’s recent announcement regarding the creation of a U.S. Crypto Strategic Reserve. This proposed initiative aims to establish the United States as the “Crypto Capital of the World” by accumulating a mix of crypto assets, primarily Bitcoin and Ethereum.
Despite the ambitious vision, the plan has drawn criticism from the crypto community. Many argue that it contradicts the fundamental decentralization principle that Bitcoin represents. Concerns have also emerged that government involvement in Bitcoin’s reserve management could introduce new regulatory and political risks.
Anthony Pompliano, CEO of Professional Capital Management and a prominent figure in the crypto investment space, expressed strong opposition to the initiative. In a letter to clients, he labeled the plan as a strategic misstep that the U.S. could regret in the long run. Pompliano highlighted concerns that the reserve’s structure seemed arbitrary and could ultimately favor insiders and token creators at the expense of taxpayers.
Bitcoin Price Reacts to Market Uncertainty
Following Trump’s announcement, Bitcoin initially surged 11% to reach an intraday high of $94,770 on March 3. However, investor uncertainty led to a swift 13.8% decline, bringing Bitcoin down to $81,700 the following day. Ethereum also suffered, losing 19% from its recent peak and falling to $2,055 on March 4. Both cryptocurrencies have since shown signs of recovery, with Bitcoin trading at $87,163, up 3.6%, and Ethereum rising 3.6% to $2,180.
Bitcoin’s Struggles in 2025
Bitcoin has faced notable headwinds in 2025. Uldis Teraudklans, Chief Revenue Officer at Paybis, pointed out that Bitcoin’s price has dropped as much as 11.47% year-to-date. Meanwhile, gold—often viewed as a safe-haven asset—has gained 10.65% over the same period, further emphasizing Bitcoin’s struggle to establish itself as a reliable store of value.
A Bank of America survey found that 58% of fund managers still consider gold a dependable asset, especially amid trade war concerns, whereas only 3% trust Bitcoin in that role. Teraudklans noted that Bitcoin remains highly reactive to macroeconomic trends, including trade tensions and interest rate fluctuations. He also pointed out that Bitcoin’s increasing integration into traditional financial markets has made it more susceptible to liquidity shifts and institutional risk aversion.
Bitcoin’s volatility was particularly evident in February, which marked the worst month for the asset since 2014. The cryptocurrency plunged 17.39% over the month, a historically negative performance for a post-halving year. Analysts attribute this decline to reduced institutional interest, geopolitical tensions, and Bitcoin’s growing correlation with the S&P 500.
Long-Term Outlook
Despite the recent downturn, Bitcoin’s long-term viability remains a topic of debate. Teraudklans reiterated that Bitcoin has never been a true safe-haven asset but rather an aspirational one. “Every market cycle brings renewed discussions about Bitcoin’s role in investment portfolios,” he stated. However, he emphasized that Bitcoin still follows a long-term trajectory toward becoming a recognized risk-off asset.
He concluded that only when Bitcoin’s market capitalization rivals that of gold can serious discussions take place about its role as a primary store of value. Until then, it remains a volatile asset navigating the complexities of institutional adoption, regulatory scrutiny, and macroeconomic forces.
As investors weigh the implications of Trump’s crypto reserve proposal, Bitcoin’s near-term trajectory remains uncertain. While some see potential in the initiative, others warn that government intervention could introduce risks that challenge the very ethos of decentralized finance.
