Bitwise’s André Dragosch attributed Bitcoin ETF outflows to weaker market sentiment, saying institutions have largely maintained their exposure.

US spot Bitcoin exchange-traded funds (ETFs) recorded more than $1 billion in net outflows over three trading days, but crypto asset manager Bitwise says the withdrawals do not signal a lasting retreat by institutional investors.

Investors pulled another $116 million from the funds on Tuesday, bringing net outflows since Friday to $1.16 billion, according to SoSoValue data.

“I do think it’s related to a short-term risk-off environment rather than a structural change in institutional sentiment,” Bitwise’s head of research, André Dragosch, told Cointelegraph.

The withdrawals followed Binance’s $6.3 billion hack on Thursday, which raised concerns about investor confidence and ETF custody security.

Dragosch attributed the outflows to weaker market sentiment rather than fears over the safety of ETF holdings.

Dragosch said ETF flows reflect both long-term institutional adoption and shorter-term changes in investor sentiment.

He cited a recent Bitwise survey of 15 institutions, none of which had reduced their Bitcoin ETF exposure during the bear market. US regulatory filings also showed that most institutional investor categories, apart from hedge funds, had largely maintained their positions.

Retail investors still account for the majority of Bitcoin ETF holdings and tend to react more strongly to market volatility, according to Dragosch.

Bitwise’s analysis found that ETF inflows are closely tracked broader crypto market sentiment, which weakened around the Binance hack, he said.

Tuesday’s $116 million in outflows marked a slowdown from Monday’s $399 million and Friday’s $643 million , extending the funds’ withdrawal streak to three trading sessions.

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