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The disappointing performance of Bitcoin (BTC) has also significantly impacted Spot Bitcoin Exchange Traded Funds (ETFs). According to data from the analytics platform SoSoValue, Bitcoin ETFs recorded a staggering $1.14 billion in outflows in the two weeks leading up to February 21.

This marks the largest withdrawal since June 2024, when investors pulled $1.12 billion from the market within the same timeframe. Back then, Bitcoin remained in a prolonged sideways trend before experiencing a significant drop.

The key question now is: What is causing this massive outflow?

Federal Reserve Policy Slows Market Growth

The primary reason behind the lack of a new Bitcoin rally appears to be ongoing macroeconomic uncertainty, with the Federal Reserve (Fed) playing a crucial role. Despite investor hopes for interest rate cuts, the Fed has yet to signal any intention of implementing such measures in the near future.

Ironically, while the U.S. economy remains stronger than expected, this is actually bad news for crypto markets. Bitcoin and other high-risk assets typically thrive in low-interest-rate environments, where borrowing is cheaper and investors are more inclined to allocate capital to riskier markets.

Trade War Fuels Market Uncertainty

Another major factor contributing to market hesitation is the ongoing trade conflict between the United States and China. Just like traditional financial markets, the crypto sector dislikes uncertainty. When investors are unsure about future economic policies, they tend to adopt a wait-and-see approach, leading to sideways price action in Bitcoin and other assets.

As long as Trump remains focused on economic and geopolitical issues, it may take a while before the market fully recovers. Interestingly, this contradicts his earlier promises to implement pro-crypto policies.

Despite some positive steps—such as the dismissal of SEC Chairman Gary Gensler and a proposal to investigate Bitcoin as a potential national crypto reserve—the actual impact on the cryptocurrency sector remains minimal for now.

Long-Term Confidence Remains Strong

Amidst the short-term uncertainty, one important bullish signal remains: institutional confidence in Bitcoin is still growing. Companies with a long-term vision continue accumulating BTC, despite recent market volatility.

One of the strongest indicators of this confidence is Strategy (formerly MicroStrategy), which is persisting with its aggressive Bitcoin accumulation strategy. On Sunday, CEO Michael Saylor confirmed plans for a new Bitcoin investment, likely financed by the company’s recent $2 billion bond issuance.

Additionally, despite the recent ETF outflows, Bitcoin remains in a macro uptrend. Looking back to last summer, BTC was trading at just $53,000. Six months later, it is still up by over 80%, demonstrating its resilience and long-term growth potential.

Conclusion – Short-Term Uncertainty, Long-Term Optimism

🔹 Bitcoin ETFs have seen record outflows, but this trend is largely driven by macroeconomic uncertainty and Federal Reserve policies.
🔹 The U.S.-China trade war adds further hesitation to both traditional and crypto markets.
🔹 Despite this, institutional investors like Strategy remain committed to Bitcoin, signaling strong long-term confidence.

While short-term volatility may persist, Bitcoin’s long-term outlook remains bullish, with institutional adoption and macroeconomic trends still favoring upward momentum.