Bitcoin has fallen nearly 50% from its record high above $126,000 last October, raising fears of another “crypto winter.” In the past month alone, the cryptocurrency has dropped more than 25%, weakening confidence in the digital asset market.
The sharp decline has hurt sentiment among investors who once viewed bitcoin as “digital gold” and a hedge against market uncertainty. The fall has also surprised traders who expected strong gains under a crypto-friendly political environment.
Despite the price crash, exchange-traded fund data suggests investors are not fleeing entirely. The iShares Bitcoin Trust (IBIT) has seen about $2.8 billion in net outflows over the past three months. However, over the past year, the fund still holds nearly $21 billion in net inflows.
Across all U.S. spot bitcoin ETFs, net outflows total around $5.8 billion in the past three months. Yet, over a one-year period, the category remains positive with $14.2 billion in net inflows. Analysts say this pattern shows trimming, not panic selling.
Matt Hougan, chief investment officer at Bitwise Asset Management, said ETF investors are not driving the sell-off. He suggested that hedge funds and short-term traders may be reducing positions as momentum weakens.
Meanwhile, gold prices have climbed to record highs, adding pressure to bitcoin’s “store of value” narrative. Some investors question why bitcoin continues to fall while traditional safe-haven assets rise.
Experts say long-term investors who hold bitcoin as a small part of diversified portfolios may be willing to endure volatility. For now, ETF flow data indicates caution and repositioning — but not a mass exit from crypto.
