Bitcoin ETFs lose $1.16B as Bitwise calls selling ‘short-term’

US spot Bitcoin exchange-traded funds (ETFs) recorded more than $1 billion in net outflows over three trading days, but crypto asset manager Bitwise says the withdrawals do not signal a lasting retreat by institutional investors.

Investors pulled another $116 million from the funds on Tuesday, bringing net outflows since Friday to $1.16 billion, according to SoSoValue data.

“I do think it’s related to a short-term risk-off environment rather than a structural change in institutional sentiment,” Bitwise’s head of research, André Dragosch, told Cointelegraph.

The withdrawals followed Binance’s $6.3 billion hack on Thursday, which raised concerns about investor confidence and ETF custody security.

Dragosch attributed the outflows to weaker market sentiment rather than fears over the safety of ETF holdings.

Institutions are holding on

Dragosch said ETF flows reflect both long-term institutional adoption and shorter-term changes in investor sentiment.

He cited a recent Bitwise survey of 15 institutions, none of which had reduced their Bitcoin ETF exposure during the bear market. US regulatory filings also showed that most institutional investor categories, apart from hedge funds, had largely maintained their positions.