Bitcoin ETFs had a two-and-a-half week. Inflows started hot at $1.44 billion over the first three days, then investors withdrew $829 million by Friday, bringing the weekly net total to just $619 million.
The culprit, as usual, when markets get nervous: geopolitics. In particular, the price of oil, which rose 60% after the US attack on Iran, before returning to around 102 dollars per barrel. When this kind of commodity boom happens, risk assets across the board take a hit — and Bitcoin, for all its “digital gold” label, trades as a risk asset when things get ugly.
The numbers tell a clear story
According to the latest CoinShares weekly report, the capital’s first week flood coincided directly with the US attack on Iran. Bitcoin dominated at $521 million, and Ethereum and Solana also attracted meaningful capital. XRP was the odd one out, posting the only significant breakout among major assets.
Price action followed the trends almost perfectly. According to data from CoinGecko, from March 1 to 5, Bitcoin increased by about 11% from $66,356 to $73,648. Then reality set in.
Since last Thursday, BTC is down about 8% to around $67,777. The pattern—quick money in, quick money out—was less a crisis of faith and more like professionals doing what professionals do.
“Portfolio managers often take positions early in the week, catch the move and then reduce risk before the weekend or geopolitical uncertainty. This is not a crypto story – this is an equity markets story.”
It’s Nima Beni, the founder of Bitlease, who describes streams as standard position management, not belief elimination. In English: the smart money moved 11% faster, bringing more uncertainty ahead of the weekend. Textbook Institutional Behavior.
One notable change from previous weeks: US investors have taken the brunt this time. European and Asian counterparts were relatively calm, suggesting that the geopolitical catalyst had a distinctly American flavor, given Washington’s direct involvement in Iran’s attacks.
Oil is the variable no one wanted
Here is something about the price of oil and crypto. When crude oil rises to $119 a barrel — even temporarily — it sends shock waves through every asset class. Higher energy costs lead to inflationary expectations, which lead to interest rate fears that make riskier assets more attractive. It’s a domino chain that Bitcoin can’t afford to lose.
Jonathan Randin, senior market analyst at PrimeXBT, directly pointed to rising geopolitical risks as a major factor in the weekend’s breakout. Iran’s crisis intensified with the confirmation of activities around the Strait of Hormuz, which blocks 20% of the world’s oil supply, by the authorities of the Islamic Revolutionary Guard Corps. It’s not the kind of headline that makes portfolio managers excited for the weekend.
Oil has since bounced back from its peak of $119 to $102, but it has risen enough to keep markets on edge. For context, crude oil was trading around $74 a few weeks ago. A 38% sustained increase in electricity prices is not something the markets are going to shake off quickly.
What investors should watch
The net positive figure of $619 million is still healthy by historical standards. For perspective, Bitcoin ETFs saw net outflows in the few weeks leading up to 2024. The fact that inflows have survived a geopolitical shock and the growth rate of oil – even in reduced form – suggests that the underlying demand has not been broken.
But the calculus of risk has changed. If oil stays above $100 and Middle East tensions escalate, expect to see more of the same pattern: institutional equity enters the decline, but pulls out at the first sign of danger over the weekend. Bitcoin’s correlation with traditional risk assets increases during geopolitical crises, which means that the thesis of an “asymmetric hedge” is tested more severely just when holders need it.
Watch the Strait of Hormuz headlines carefully. If supply disruptions occur, oil could retest $119 or higher, and the next round of ETF withdrawals could be significantly higher than $829 million.
Bottom line: Bitcoin ETF flows remain positive, but margins narrow after oil-based macro volatility worries. The first week’s rally in institutional appetite is alive and well – the weekend’s pullback proved it has limits. Until crude oil stabilizes and Iran tensions ease, expect strong, risk-driven flows rather than bulls needing to break sustained buying pressure.
