Bitcoin-etfs/">US spot Bitcoin exchange-traded funds saw more than $1 billion in net outflows over three trading sessions, though Bitwise argues the withdrawals do not indicate a broad institutional retreat. Investors withdrew a further $116 million on Tuesday, taking net outflows since Friday to $1.16 billion, according to SoSoValue data.

André Dragosch, Bitwise’s head of research, attributed the selling to a short-term risk-off mood and weaker market sentiment, rather than a structural change in institutional attitudes. The withdrawals followed a $6.3 billion Binance hack on Thursday, which renewed concerns about investor confidence and ETF custody.

Dragosch said ETF flows reflect both long-term institutional adoption and short-term shifts in sentiment. In a recent Bitwise survey of 15 institutions, none reported reducing its Bitcoin ETF exposure during the bear market. US regulatory filings also showed that most institutional investor categories, with hedge funds as an exception, had largely maintained their positions.

Retail investors still hold the majority of Bitcoin ETF shares and tend to respond more strongly to market volatility, Dragosch said. Bitwise’s analysis also found that ETF flows track broader crypto market sentiment, which weakened around the Binance incident.

Tuesday’s outflow was smaller than Monday’s $399 million and Friday’s $643 million, bringing the withdrawal streak to three trading sessions. The Crypto Fear & Greed Index rose to 34 from 26 on Monday but remained in the “Fear” category. Bitcoin was up about 1.6% over 24 hours and trading near $78,000 at publication, according to CoinGecko. Net outflows for the funds in 2026 stood at approximately $153 million.

The Binance hack also prompted questions about ETF custody, as major funds rely on a limited number of custodians. Dragosch distinguished exchange security from institutional custody, noting that the Binance incident affected internet-connected hot wallets. He said institutional funds held with Coinbase custody are kept in cold storage, which is not connected to the internet.

Sources: Cointelegraph.