Bitcoin’s brief phase as a war hedge appears to be fading as institutional investors move from heavy buying to taking profits. After the US and Israel attack on Iran, Bitcoin [BTC] quickly recovered from its slump, where it had reached $63,000.
This recovery was supported by strong institutional demand, with more than $1.14 billion flowing into spot Bitcoin ETFs between March 2 and 4.
Bitcoin ETF Analysis
During this period, BlackRock’s IBIT led the inflow, attract $892.2 million, including a one-day inflow of $306.6 million on March 4. This has helped Bitcoin [BTC] recovers to the $72,000 level.
However, the bullish momentum started to weaken on March 5, when the ETF sector recorded net outflows of $227.9 million.
Selling pressure increased further on March 6, with total outflows reaching $348.9 million. Fidelity’s FBTC saw the largest drawdown at $158.5 million, while BlackRock also recorded a rare outflow of $143.5 million.
Executives weigh in
Jacob King, CEO and founder of SwanDesk, says the same: noted,
“We are 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 that the Bitcoin mirage is over.”
While Bitcoin’s volatility dominated headlines, the broader altcoin ETF market showed a similar rise and fall pattern, indicating a broader slowdown in investors’ risk appetite.
Ethereum ETF sees mixed feelings
Ethereum [ETH]Especially , experienced a sharp change.
On March 4, Ethereum ETFs saw strong demand, attract $169.4 million in inflows, supported by a rare $59.5 million investment in Grayscale’s ETH product. However, the momentum quickly dissipated.
Fidelity’s FETH became a major source of outflows; on March 5, $115 million left the fund and another $67.6 million on March 6.
Blockchain analytics firm Arkham also pointed out this shift, noting:
Source: Arkham/X
Solana and XRP ETF paint a different picture
The slowdown was also visible in other major altcoins such as Solana [SOL] and Ripple [XRP]. Solana’s previous entry series ended on March 5 after $6 million exited Fidelity’s FSOL, contributing to a total industry outflow of $8.6 million on March 6.
XRP ETFs also showed weakness. After days of steady inflows, the asset recorded a combined outflow of $22.77 million in the last two days of the week.
Source: SoSo value
This is accompanied by a broader institutional expansion into crypto, driven by new products and improved infrastructure.
What’s more?
A major development occurred when 21Shares also launched the first US 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 has filed an updated S-1 filing for its Bitcoin Trust, demonstrating its continued commitment to the sector.
Together, these moves suggest that while markets are currently exercising short-term caution, institutions are steadily building the infrastructure necessary for a much larger multi-asset crypto investment market in the future.
Final summary
- While Bitcoin ETFs saw strong inflows earlier this week, the sudden reversal highlights growing caution among institutional investors.
- The outflows in Ethereum, Solana and XRP show that institutional caution extends beyond BTC.