US Bitcoin reserve triggers $370M in ETF outflows

Bitcoin (CRYPTO:BTC) exchange-traded funds (ETFs) recorded nearly $370 million in net outflows on March 7 following President Donald Trump’s executive order establishing a US strategic Bitcoin reserve, according to data from Farside Investors.  

The market reaction suggests that institutional investors were disappointed by the announcement, which did not include immediate Bitcoin purchases.

“While [Trump’s executive order] acknowledges crypto’s role in global finance, the lack of fresh purchases disappointed markets,” stated Alvin Kan, chief operating officer of Bitget Wallet.

Trump’s executive order, signed on March 6, created both a strategic Bitcoin reserve and a digital asset stockpile to hold cryptocurrencies acquired through legal proceedings.

“Develop budget-neutral strategies for acquiring additional Bitcoin, provided that those strategies impose no incremental costs on American taxpayers,” the order directed officials.

Temujin Louie, CEO of Wanchain, noted that the limited scope of the order fell short of market expectations.

However, Bryan Armour, director of passive strategies research at Morningstar, pointed out that the order leaves room for Bitcoin acquisitions without burdening taxpayers.

“That could introduce a new buyer to the Bitcoin ecosystem,” Armour stated.  

Bitcoin’s spot price dropped over 2% on March 7, according to Google Finance. Meanwhile, data from CME showed a decline of more than 2% across most of Bitcoin’s futures contracts.  

Despite the short-term market reaction, some analysts view the development as significant.

“The US Strategic Bitcoin Reserve means… Other countries will buy bitcoin… [and] Financial institutions have no excuse” not to add BTC allocations, stated Ryan Rasmussen, head of research at Bitwise.

“A simple buy the rumor, sell the news event,” described Austin Arnold, co-founder of Altcoin Daily, regarding the sell-off, adding, “Long term, this is bullish.”

At the time of reporting, the Bitcoin price was $82,499.66.