Bitcoin Outflows Hit $290M as Riskoff Sentiment Grips Markets Amid Geopolitical Tensions

More than $290 million flowed out of Bitcoin ETFs last week as a broad “risk-off” shift swept through global markets, driven by escalating geopolitical tensions and mounting macro pressures. Farside Investors data shows cumulative weekly outflows of roughly $296 million between March 24 and March 27, with BlackRock’s IBIT leading the redemptions among major Bitcoin funds.

Friday saw the sharpest single-day decline, with $225.5 million exiting U.S. spot Bitcoin ETFs overall. BlackRock’s IBIT alone shed $201.5 million on that day, the largest single-fund outflow of the entire week.

The volatility capped a rollercoaster seven days for Bitcoin funds. The week opened strongly with $167.2 million in inflows on Monday before sentiment reversed sharply as risk appetite deteriorated across asset classes.

The timing of the outflows coincides with escalating tensions in the Middle East. On Monday, President Donald Trump told the Financial Times he could “take the oil in Iran” and potentially seize Kharg Island, the country’s major fuel hub. The rhetoric added to existing market anxiety following weeks of conflict that began February 28.

Higher oil prices are feeding inflation concerns, which in turn pushes rate-cut expectations further into the future. For Bitcoin and other risk assets, this removes a key catalyst needed to find a floor.

“Risk-off is clearly the mood amongst markets,” Josh Gilbert, market analyst at eToro, told Decrypt. He pointed to Bitcoin’s slide to a three-week low and the S&P 500’s fifth consecutive weekly loss.

“The macro forces working against it are compounding,” Gilbert added. “Triple-digit oil is fuelling inflation fears, which pushes rate cut expectations further out, which in turn removes the very catalyst that risk assets need to find a floor.”

Despite the ETF outflows, Bitcoin has shown relative resilience compared to broader equity markets. The world’s largest cryptocurrency traded around $68,000 on Sunday, down roughly 2% over the past 24 hours and about 6% over the past seven days, according to CoinGecko data.

This outperformance marks a notable divergence. Bitcoin is traditionally considered a risk asset, yet it has weathered the recent conflict better than stocks since the Iran war escalated on February 28.

“Bitcoin had been a surprising standout despite its risk status as an asset,” Gilbert said. However, he cautioned that ongoing tensions show Bitcoin is “in no way immune to this indiscriminate sell-off.”

As of Monday, Bitcoin was trading at $67,574, up 1.4% in the last 24 hours after sliding into the $65,000 range earlier in the session.

A potential turning point could come if ceasefire talks progress, according to analysts. Gilbert suggested a ceasefire could spark a “strong relief rally,” but warned that without credible de-escalation, markets will likely remain defensive with “more choppy sessions ahead.”

Peter Chung, head of research at Presto Labs, linked the outflows directly to dimming ceasefire expectations. “I think what drove it was the general risk-off trend as the expectation for the ceasefire waned as the peace talks faltered towards the end of the week,” he told Decrypt.

Pratik Kala, head of research at Apollo Crypto, attributed the $290 million in outflows to “risk-off sentiment and end of quarter rebalancing,” but noted the figure is “quite normal” given recent trends.

Some analysts cautioned against reading too much significance into the weekly flow numbers. Kala emphasized that Bitcoin ETF flows reflect more than just directional positioning.

“ETF inflows/outflows are not only directional funds; there is a lot of basis trading done by hedge funds,” Kala explained. “Therefore, there are no hard limits or thresholds that would signal a structural change.”

He also pointed to Bitcoin’s relative strength against other asset classes as “notable and very supportive,” suggesting the current selloff may be temporary rather than a fundamental shift in market sentiment.

USDC circulation reached record levels despite the broader market downturn, signaling that holders are drawn to stablecoins as payments tools rather than pure risk assets. Similarly, Bitcoin’s pricing relative to other options suggests the asset still holds value in investor portfolios even during turbulent periods.

The market is increasingly pricing in a Federal Reserve rate hike, a sharp reversal from just months ago when traders expected multiple cuts. Gilbert flagged this shift as particularly problematic for risk assets like Bitcoin.

Fed Chair Jerome Powell’s scheduled remarks present another potential pressure point for markets still digesting the implications of higher-for-longer rates.

On Myriad, a prediction market, user sentiment leans bearish with 56.8% of traders pricing a Bitcoin decline to $55,000 more likely than a rally to $84,000. This reflects broader market caution about the near-term direction of crypto prices amid macro headwinds.