Bitcoin ETFs Bleed Again as Gold Takes Control

Key Insights

• Bitcoin ETFs tracked a fourth straight month of outflows
• Gold ETFs absorbed capital during Bitcoin weakness
• Restrictive policy limited demand for non-yielding assets

Bitcoin ETFs extended their losing streak in February as Bitcoin traded near $64,850 and headed toward another negative monthly close. U.S. spot funds recorded persistent outflows while gold products attracted fresh capital. Investors reduced exposure as restrictive monetary conditions raised the opportunity cost of holding non-yielding assets.

The slowdown in Bitcoin ETFs marked a sharp reversal from the aggressive accumulation phase seen earlier in the cycle. Since October, balances and rolling net flows trended lower, reflecting cooling demand. The focus keyword Bitcoin ETFs remained central to broader risk sentiment as capital rotated toward traditional safe havens.

ETF Outflows Deepen Across Major Funds

Checkonchain data showed total net assets in U.S. spot Bitcoin ETFs declined to $84.3 billion from a peak near $170 billion in October 2025. Cumulative net inflows fell to roughly $54 billion after previously reaching $63 billion. Since July 2025, aggregate flows totaled just $5 billion, reflecting a steep drop in fresh allocations.

Bitcoin ETF AUM. Source: checkonchain

Bitcoin researcher Axel Adler Jr. tracked seven sessions between Feb. 12 and Feb. 19 and calculated total net outflows of 11,042 BTC. Feb. 12 marked the sharpest daily reduction at 6,120 BTC, equivalent to about $416 million. Back-to-back withdrawals of 1,520 BTC and 1,980 BTC followed on Feb. 17 and Feb. 18. Only two sessions posted gains, with Feb. 6 adding 5,900 BTC to fund balances.

Adler stated that three consecutive positive sessions were required to confirm renewed accumulation. Until that threshold appeared, ETF flows continued to supply liquidity to the market rather than absorb it. That shift weighed on short-term sentiment.

Gold Absorbs Capital as Bitcoin ETFs Cool

Bold Report data mapped the rotation between Bitcoin ETFs and gold ETFs through 90-day rolling flows. Bitcoin inflows peaked near $16 billion in March 2024, then cooled to between $3 billion and $4 billion during mid-year. A final surge carried flows to $21.6 billion in December 2024 before fading again.

Gold followed a different trajectory. Flows remained negative until July 2024, then accelerated to $30 billion by April 2025. During March and April 2025, Bitcoin’s 90-day flows slipped to negative $2 billion. Gold peaked again at $36 billion in October 2025, while Bitcoin demand weakened into year-end. In January 2026, gold flows reached $29 billion before easing to $21 billion by mid-February as Bitcoin ETFs stayed in negative territory.

This handoff reflected relative risk preferences rather than structural rejection of digital assets. Investors favored instruments with lower volatility during tightening cycles. Bitcoin ETFs lost incremental allocations as gold captured defensive capital.

Restrictive Conditions Limit ETF Accumulation

Into The Cryptoverse data showed Bitcoin ETFs shed about 87,000 BTC since November 2025, including roughly 15,000 BTC during February alone. Total balances stood near 1.26 million BTC, down from 1.36 million BTC at their prior high. BlackRock’s IBIT holdings declined to 759,000 BTC from 806,000 BTC, while Fidelity’s FBTC fell to 186,000 BTC from 213,000 BTC.

ITC Crypto founder Benjamin Cowen described the first quarter of 2026 as a late-cycle restrictive digestion phase. The U.S. Federal Reserve halted balance sheet runoff in December 2025, but policy remained tight relative to growth expectations. The federal funds rate stayed above the 2-year Treasury yield, while the 10-year yield traded near 4.1% and the real yield held around 1.7% to 1.8%.

Positive real yields provided inflation-adjusted returns in fixed income markets. That dynamic raised the opportunity cost of holding Bitcoin ETFs, which generate no yield. Cowen noted that in prior tightening cycles, Bitcoin weakened before equities showed stress, as seen in 2019.

Bitcoin ETFs historically attracted durable inflows when real yields declined or when clear easing cycles began. Neither condition materialized during the current quarter. Without a shift in liquidity or rate expectations, ETF demand remained subdued.

The immediate focus rested on whether Bitcoin could stabilize above recent support and reclaim short-term momentum. Traders watched for three consecutive positive ETF sessions as a signal of renewed accumulation. Until that occurred, Bitcoin ETFs remained exposed to further supply pressure.

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