Three-week record outflows hit Bitcoin ETFs amid escalating Iran conflict concerns
Thursday witnessed $171 million flowing out of US Bitcoin ETFs, marking the most substantial withdrawals in three weeks as investors grew anxious about potential weekend intensification of tensions between the US-Israel alliance and Iran.
Exchange-traded funds tracking Bitcoin in the United States experienced redemptions totaling $171 million on Thursday, representing the largest single-day withdrawal since March 3, when these investment vehicles recorded $348 million in outflows.
The iShares Bitcoin Trust ETF (IBIT) from BlackRock topped the withdrawal list with $41 million, while Fidelity's Wise Origin Bitcoin Fund (FBTC) came second with $32 million in redemptions, the ARK 21Shares Bitcoin ETF (ARKB) recorded sales of $30.5 million, and Grayscale's Bitcoin Trust ETF (GBTC) experienced $24 million in outflows, based on information from Farside Investors.
These withdrawals come after a stretch of strong appetite for Bitcoin ETFs, which have accumulated $1.36 billion in net inflows throughout March to date and are positioned to record their first month of positive net accumulation since October 2025, during which these funds registered $3.42 billion in net inflows, based on Sosovalue data.
Spot Bitcoin ETFs listed in the United States serve as an indicator of institutional appetite for Bitcoin (BTC), which dropped beneath the $70,000 threshold on Thursday. BTC declined 4.7% throughout the previous week and was changing hands at $67,780 as of this writing, based on CoinMarketCap data.
Nevertheless, Bitcoin ETFs remain just "one good day away" from erasing their year-to-date negative flows, according to Eric Balchunas, senior Bloomberg ETF analyst, who commended the ETFs for their "incredible fortitude" throughout Bitcoin's 46% decline from the $126,198 record peak achieved in October 2025.
"For context, when gold fell 40% in a short time frame about 10 years ago, it saw 1/3 of its investors bail," said Balchunas in a Tuesday X post.
Investors fear weekend war escalation
The sell-off in Bitcoin ETFs comes after news reports indicated that the US Department of War is deploying thousands of military personnel to the Middle East region, according to sources with knowledge of the situation who spoke with Reuters on Tuesday.
On Thursday, President Donald Trump of the United States revealed a 10-day extension to the ceasefire affecting Iranian energy infrastructure, pushing the deadline to April 6, while pointing to productive ongoing negotiations as the reason.
Notwithstanding the ceasefire extension, market participants continue to harbor concerns about another unforeseen weekend escalation, according to Kyle Rodda, senior financial analyst at Capital.com, who shared his thoughts with Cointelegraph. He said:
"Amidst the headline risk and he-said, she-said games about whether negotiations between the US and Iran are taking place, the US is moving assets and personnel towards the Middle East to prepare for what looks like a limited ground invasion."
Investors remain on edge regarding any potential escalation after being surprised by the original US and Israeli military strikes on Iran on Feb. 28, which took place during the course of constructive negotiations, Rodda further explained.