Bitcoin fell below $90,000 for the first time in four sessions, weighed down by uncertainty surrounding President Trump’s Strategic Bitcoin Reserve (SBR) executive order and a sharp rise in spot ETF outflows.
The digital asset closed at $86,268 on Saturday, down 0.59%, extending a three-day losing streak. This followed a 3.53% decline on Friday, underscoring growing investor skepticism over the administration’s handling of its newly announced Bitcoin reserve.
The Kobeissi Letter, a widely followed financial analysis publication, attributed the downturn to a lack of clarity on how the U.S. government plans to fund its strategic bitcoin reserve.
Bitcoin falls sharply after President Trump signs Executive Order establishing a Strategic Bitcoin Reserve. Why? No explanation on how the reserve will be funded aside from Bitcoin already held by the US. It’s simply a promise to not sell what they currently hold.
ETF Outflows Accelerate as Institutional Demand Wanes
Investor sentiment further deteriorated amid continued outflows from bitcoin spot exchange-traded funds (ETFs). On March 7, U.S. BTC-spot ETFs recorded net outflows of $739.2 million, marking the fourth consecutive week of institutional withdrawals. Data from Farside Investors revealed significant capital flight from major funds:
- Fidelity Wise Origin Bitcoin Fund (FBTC) saw net outflows of $201 million, extending its outflow streak to six weeks.
- ARK 21Shares Bitcoin ETF (ARKB) lost $163.5 million.
- iShares Bitcoin Trust (IBIT) recorded outflows of $129.6 million.
The continued capital exodus reflects a weakening institutional appetite for Bitcoin amid growing concerns about the U.S. economy. Kalshi, a prediction market platform, raised the probability of a U.S. recession to 41.1% as of March 7, up from 17% in January. Rising inflationary risks and uncertainty surrounding U.S. trade policies have compounded investor caution, further pressuring Bitcoin prices.
Tony Sycamore, a market analyst at IG.com, noted that bitcoin’s decline stems from disappointment over the U.S. government’s approach to the reserve.
Bitcoin is trading at $86,329, down 8.39% for the week, a telling result after the mountain of disappointment that followed last week’s US Strategic Crypto Reserve announcement and White House Crypto Summit on Friday. As crypto czar David Sacks stated, the US Strategic Reserve will be formed using coins already in the US Government’s possession, including 198,000 Bitcoins worth about $17 billion.
Source: Tony Sycamore on X
He added that while the decision not to sell existing holdings is positive, it does not introduce fresh buying into the market.
In simple terms, the formation of the Reserve will be a transfer of crypto between government accounts rather than new buying entering the market to add to the stockpile. With the Trump Administration apparently running out of fresh ideas to boost digital asset prices, the driver of Bitcoin’s price will be US trade policy, recession fears, and risk appetite.
Bitcoin’s price trajectory remains tied to broader macroeconomic conditions, including Federal Reserve policy decisions, U.S. trade policies, and ongoing developments in the digital asset regulatory landscape. The cryptocurrency market will continue to monitor ETF flows for signs of renewed institutional interest, while market participants weigh the impact of the U.S. government’s evolving bitcoin strategy on long-term price action.
