Bitcoin ETF loses nearly $1 billion in two days, BTC briefly drops below $60,000, "paper Bitcoin" controversy reignites

February 6 News, Bitcoin spot ETF continues to face capital outflows, sparking intense market discussions about the impact on price and liquidity. Data shows that on Thursday, ETF net outflows reached $434 million, with an additional outflow of $545 million on the previous trading day, totaling nearly $1 billion over two days. Although there was a $561 million inflow at the beginning of the week, it still couldn’t reverse the overall net outflow of approximately $690 million this week.

As capital pressure mounts, Bitcoin prices have also weakened, briefly dropping to $60,000, hitting a new low since October 2024, and currently trading around $64,900. The market has yet to reach a consensus on the reasons for the decline, but changes in ETF capital are considered one of the important sentiment signals.

Since the launch of the Bitcoin spot ETF in January 2024, institutional adoption has been viewed as a key driver for mainstream acceptance. However, recent controversies over “paper Bitcoin” have reignited. Technical analyst Bob Kendall pointed out that the same Bitcoin can now support multiple forms of financial exposure simultaneously, a structure more akin to a “fractional reserve pricing system” rather than a market fully backed by physical assets.

Similar concerns have been raised before. Hardware wallet company analyst Josef Tětek warned that such products could generate a large amount of nominal Bitcoin without a full physical backing, thereby suppressing real supply and demand.

Despite ongoing debates, ETF sizes remain substantial. As of now, the assets under management for Bitcoin spot ETFs are close to $81 billion, with a cumulative net inflow of about $54.3 billion, indicating that institutional interest has not waned, only becoming more cautious in pace.

In other assets, Ethereum ETFs saw approximately $80.8 million in outflows, while XRP and SOL-related ETFs experienced small inflows. In the short term, the interaction between ETF capital movements and price volatility will continue to be a market focus.