Trading Star Tuesday Issue 5 Space Summary: ETF funds net outflow, is it a bull run bubble burst or a short-term adjustment?

Following our in-depth discussions in previous episodes on the technical revolution of the Bitcoin second-layer ecosystem, the modeling cipher of on-chain data, and the secrets behind extreme market impulses, this episode once again focuses on the hot phenomena of the Crypto Assets market.

On April 1, 2025, this space on Tuesday evening, under the leadership of host Krystal, together with three heavyweight guests, Chinese Web 3.0 professional host Brother Jia, Citrea_China Chinese Ambassador Coral, and Bithot Pot manager Mike, brought us a discussion on "ETF fund net outflow, is the bull market bubble bursting or a short-term adjustment?" Deep conversations. The following is a wonderful review and core views of this program.

This episode of Space focuses on the recent phenomenon of net fund flows into ETFs that have garnered significant attention in the Crypto Assets market. Combining historical data and market structure, the guests analyzed the implications behind this trend from multiple dimensions and provided practical advice for ordinary investors. Here are the six core topics discussed along with the guests' insightful perspectives:

From historical data, the correlation between ETF capital net outflow and market cycles.

Host Krystal opened with the data: On March 18, the top ten Bitcoin spot ETFs in the U.S. experienced a net outflow of $380 million in a single day, reaching a new high for 2025. The total holdings dropped from the February peak of 1.58 million BTC to 1.51 million BTC, but the Bitcoin price remained stable, fluctuating around $84,000. The guests unanimously agreed that the flow of ETF funds is closely related to the market cycle, but the correlation is evolving.

Mike pointed out that the 250,000 BTC outflow caused by the Grayscale GBTC unlock wave in 2024 is fundamentally different from this year's outflow, as the former is driven by arbitrage institutions and bankruptcy liquidation, while the outflow in 2025 is more influenced by macroeconomic uncertainties such as geopolitical tensions and unmet expectations of Trump’s policies.

Qie Ge added that historical data shows that a price adjustment of 20%-35% during a bull market is a normal phenomenon, and the increase in on-chain non-liquid Bitcoin supply indicates that long-term investors are absorbing ETF selling pressure, which suggests that the market's sensitivity to capital flows may be decreasing.

Coral mentioned from a macro perspective that the economic cycle, central bank interest rate policies, and project fundamentals jointly dictate the flow of funds, emphasizing that the stability of industry fundamentals is key to the sustainability of a bull market.

How to distinguish whether a net outflow of funds is a normal adjustment or a bubble bursting signal?

For ordinary investors, determining the nature of capital outflow is crucial. The guests provided the following distinguishing criteria:

Qie Ge believes that a short-term price drop of 20%-35% is considered an adjustment, while a bubble burst is accompanied by large-scale continuous outflows (over 500 million in a single day or net outflows for 9 consecutive days) and extreme panic, such as project teams stopping marketing and the halt of stablecoin minting. The current market sentiment is optimistic, which is a normal adjustment.

Coral adds that investors should pay attention to market sentiment, trading activity, and technical breakthroughs. If the industry continues to advance steadily (such as the development of the Bitcoin second-layer ecosystem), there is no need to be overly pessimistic.

Mike suggests that beginners first establish a cognitive framework and learn risk control instead of blindly chasing news to avoid being misled by emotions. He also mentioned that the current outflow of stablecoins from exchanges indicates a short-term bearish sentiment, but it is far from a collapse.

After a short-term adjustment, what factors can revive capital inflows?

If the current outflow is only a short-term adjustment, what catalysts does the market need to recover its upward trend? The guests provided answers from the perspectives of compliance and native encryption:

Coral focuses on the compliance attributes of ETFs, pointing out that positive market sentiment (such as the implementation of favorable policies), improving economic indicators, and increased holdings by large institutions (such as BlackRock and Blackstone) are key driving factors.

Mike emphasized that macro factors such as the Federal Reserve's interest rate cuts, the strength of the US stock market, and the weakness of the US dollar enhance the attractiveness of compliant funds. He is also optimistic about the long-term benefits brought by Trump's deregulation (such as withdrawing lawsuits and promoting Bitcoin reserves).

Qie Ge proposed the comprehensive effects of regulatory clarity (such as clear stablecoin policies), institutional adoption (such as the historical effect of $40 billion inflow), and price momentum (a $100 million inflow increases returns by 4.7%), calling for attention to the activity of Asian capital.

How is the current outflow of ETF funds different from the past?

Guests analyzed the uniqueness of ETF outflows in 2025 from the perspective of market structure evolution:

Qiegao categorizes ETFs into active, options, and thematic types, pointing out that active ETFs (with a scale of nearly 300 billion in 2024) are challenging traditional cost analysis frameworks, options ETFs (with over 350 funds) are growing rapidly, while thematic ETFs (such as those related to AI) are performing well in the European market. The 24/7 trading characteristics of Crypto Assets have disrupted traditional analytical logic.

Mike focuses on on-chain capital and stablecoin trends, pointing out that the flow of USDT/USDC reflects regional investor behavior. The current exchange stablecoin balance has decreased from 70 billion to 62 billion, indicating a short-term conservative sentiment, but on-chain data is not yet fully pessimistic.

Coral believes that institutional participants, such as hedge funds, have replaced arbitrage institutions as the main sellers, and the upgrading of derivative hedging mechanisms has made capital flows more non-linear.

What signs should we be wary of if the market has reached its peak?

Guests remind that if the bull market is nearing its end, the following signals are worth paying attention to:

Brother Qie listed signs such as large-scale continuous outflows (over 50% price drop), project parties stopping activities, stagnation in stablecoin minting, and institutional withdrawals, emphasizing that there are currently no such extreme situations.

Mike added that the continuous decline in on-chain TVL, the intensified net capital outflow from exchanges, and the weakening hedging properties of Bitcoin may be peak signals.

Coral suggests monitoring for policy shifts (such as regulatory tightening) and stagnation in technological progress.

The impact of continuous outflows of ETF funds on Bitcoin prices

The guests unanimously believe that short-term outflows have limited impact on Bitcoin prices, but if they continue in the long term, caution is needed:

Mike analyzed that the outflow of USD pricing will be significant in 2025 (over 1 billion on February 26), but the outflow in BTC pricing will be smaller, reflecting an increased market adaptability.

Qie Ge predicts that if outflows intensify (exceeding 500 million daily), the price may drop to 50,000, but the current fluctuations are normal adjustments, and institutions are still positioning themselves.

Coral emphasizes that if the fundamentals of the Bitcoin Layer 2 ecosystem continue to improve, it can hedge against the pressure of capital outflow.

This concludes the exciting content of this episode of Techub News "Trading New Tuesday" Space. From the correlation of historical data to the disruptive changes in market structure, the three guests have deconstructed the multiple aspects of ETF fund net outflows from a professional perspective, providing valuable judgment basis and operational ideas for investors.

As Qie Ge said at the end: "The bull market is still in its early stages, and adjustments are the norm rather than the endpoint." Thanks to Krystal for the wonderful hosting, and thanks to Qie Ge, Coral, and Mike for their in-depth sharing, as well as to every listener for their company! Don't forget to download the newly upgraded Techub News APP to read, like, and share to earn points and participate in the points blind box lottery.

Next Friday, we will bring you a special column "No Defense in the Crypto Circle", so stay tuned. Let's ride the waves together in the bull market and create a prosperous future!