US Bitcoin (BTC) and Ethereum (ETH) exchange-traded funds (ETFs) are seeing sustained withdrawals as the focus shifts to altcoins such as Solana and XRP. Indeed, around $3.8 billion has exited Bitcoin ETFs over the last five weeks, as Ether funds follow suit. Meanwhile, a few altcoin-related products are still attracting fresh capital. This trend is happening amid broader questions about BTC’s evolving role in financial markets and the narratives that once brought its popularity to the surface. Spot Bitcoin ETFs in the United States saw net outflows of about $316 million through Feb. 20, the fifth week in a row of capital cashing out of the funds, the longest outflow in close to a year. The pressure began early in a shortened trading week with negative flows on Tuesday, Wednesday, and Thursday, but a slight recovery on Friday. BlackRock’s IBIT and Fidelity’s FBTC received small inflows over the last day, which weren’t enough to reverse the overall losses. The most recent round of withdrawals swallowed up billions of dollars of investor capital from BTC products since late January. Bitcoin ETF overall net assets are still very high, but the new trend suggests a shift from near-constant buying to distribution. This move is partly a reflection of Bitcoin’s price action. BTC’s value is around $66,000 and $68,000, sharply down from its all-time highs months before, but below key technical levels that many traders interpret as support or resistance. It is an external reflection of the market’s state of mind. Others warn that if Bitcoin sinks any deeper, it could fall back to lower price tiers, as low as $50,000, before any significant bounce comes into play. That bearish sentiment has played out in flows into ETFs, with big holders seemingly cautious and liquidity askew. Ethereum ETFs extend losses as altcoins gain momentum Spot Ether ETFs also followed Bitcoin’s trend, posting their fifth straight streak of outflows totaling nearly $123 million . At the same time, institutional appetite for Ethereum-linked funds has cooled recently. On the flip side, emerging altcoin ETFs showed resilience. Net inflows from the Solana products totaled around $14 million, continuing a pattern of investor rotation into assets they believe offer growth opportunities beyond BTC and ETH. XRP ETFs also saw minor inflows, albeit at a smaller scale. This internal rotation, in which capital moves between crypto products rather than exiting crypto entirely, challenges the narrative that investors are abandoning digital assets. Instead, it suggests a rebalancing of preferences within the ecosystem, with growing interest in assets beyond Bitcoin and Ethereum. Bitcoin faces an identity crisis beyond price swings During moments of macro uncertainty in early 2026, BTC failed to behave like a hedge asset, unlike gold, which rallied strongly. While flows are shifting, Bitcoin itself is beset by greater questions about its role in markets. According to a recent report, Bitcoin is in the midst of an “identity crisis,” in which its historical narratives no longer hold the authority they once did. Formerly portrayed as digital gold, an inflation hedge, and the best store of value in crypto, Bitcoin faces fierce competition today from other financial technologies and assets. Bitcoin’s price has fallen more than 40% from its peak, analysts say, and the usual catalysts of a rally, dip buyers, or speculative interest have not been there. Instead, gold is becoming a macro hedge, stablecoins are widely used for payments, and prediction markets are attracting speculative activity away from traditional crypto trading. Continuing arguments regarding the use of mining power and technological risks, such as quantum computing, changing AML/KYC regulations, and central bank digital currencies (CBDCs), all underscore the fact that Bitcoin’s future identity isn’t solely a function of price, but rather depends on how it coexists within a rapidly changing financial and policy context. Collectively, these forces illustrate that the current identity crisis for Bitcoin transcends short-term price volatility and touches on a much broader issue. If you're reading this, you’re already ahead. Stay there with our newsletter .
