Latest data shows that Bitcoin ( BTC ) ETFs are experiencing their largest monthly net outflows since their launch nearly two years ago, putting even more pressure on the already weak cryptocurrency market.
![图片[1]-Bitcoin ETFs are bleeding profusely! Investors have withdrawn a staggering $3.5 billion since November, with outflows nearing historical records.-OzABC](https://www.ozabc.com/wp-content/uploads/370169951ddfa9380e56fad92248a8e0.jpg)
Since November, investors have withdrawn $3.5 billion from U.S.-listed Bitcoin ETFs, almost matching the record net outflow of $3.6 billion set in February. Among them, BlackRock’s Bitcoin fund IBIT, which accounts for about 60% of the assets of such funds, recorded $2.2 billion in redemptions in November, which will be the worst monthly performance for the fund unless there is a sharp reversal.
Nick Ruck, a director at LVRG Research, said the above situation confirms that the frenzy earlier this year has completely subsided.
Bitcoin is also set to record its worst monthly performance since the cryptocurrency industry crash of 2022, when a series of cryptocurrency companies collapsed, culminating in the downfall of Sam Bankman-Fried’s FTX.
Since its launch in January 2024, the spot Bitcoin ETF has become synonymous with cryptocurrency sentiment, reshaping the way capital flows in and out of this asset class and forming a self-reinforcing feedback loop, where inflows accelerate when prices rise and outflows amplify declines when prices fall.
According to Citigroup research, for every $1 billion outflow from Bitcoin ETFs, the price falls by about 3.4%. Citigroup’s Alex Saunders has also set a bear market target of $82,000 by the end of this year (assuming zero inflows), with billions of dollars withdrawn from the ETF group suggesting further downside potential.
XS.com market analyst Linh Tran points out that spot ETFs were the core driver of Bitcoin’s record highs in the first half of the year, but now the shift in institutional fund flows is having a significant negative impact on price formation.
Rebecca Sin, senior ETF analyst at Bloomberg Intelligence, said that continued market declines and increased volatility could lead to further outflows, some of which may originate from hedge funds closing out basis trading strategies.
Bitcoin ETF saw a record $11.5 billion in trading volume last Friday (21st), but redemptions at BlackRock IBIT highlights a shift in institutional preferences and a lack of fully restored confidence.
Looking at the broader financial markets, various high-risk assets have seen pullbacks, and the short-term correlation between Bitcoin and tech stocks has reached a record high. The Royal Bank of Canada stated that Bitcoin’s volatile movement is a sign of market fatigue.
“We see Bitcoin’s volatile trading this summer as a sign of market fatigue,” wrote Lori Calvasina, Head of U.S. Equity Strategy at RBC Capital Markets, in a research report. “While the reasons for the decline are still unclear, stabilizing this asset could help alleviate some of the tension in the U.S. stock market.”
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