Massive Withdrawals Shake Bitcoin ETFs in the US

In a turbulent week for the financial markets, US-traded spot Bitcoin ETFs witnessed a staggering net outflow of $1.22 billion, marking the fourth consecutive week of capital flight. Data from SoSoValue as of November 21 reveals that the total withdrawal over this period has reached an eye-watering $4.34 billion.

What Caused the Significant Outflow from BlackRock’s IBIT Fund?

The largest movement came from BlackRock’s iShares Bitcoin Trust (IBIT) fund, which suffered a massive $1.09 billion outflow, registering as the second-largest weekly loss since its inception. This included a striking one-day outflow of $523.15 million on Tuesday, November 19. Despite these substantial outflows, the fund did witness minor inflows on the latter days of the week, with $238.47 million on Friday and $75.47 million on Wednesday.

What Was Bitcoin’s Price Reaction?

During the same week, Bitcoin’s price experienced a significant drop, declining from approximately $95,600 on Monday to $82,200 by the weekend. The Block’s data showed a weekend recovery to $87,348, with a modest 1.2% uptick in the final 24 hours. Vincent Liu, CIO of Kronos Research, observed the fragility in market structures, predicting that Bitcoin prices would hover between $85,000 and $90,000 in the near term.

Spot Ethereum ETFs did not fare much better, closing the week with a net outflow of $500.25 million, marking a downturn for the third week in a row. The only notable inflow occurred on Friday, totaling $55.71 million.

In contrast, Solana ETFs exhibited a significant inflow surge, nearly tripling from the previous week to $128.2 million. ETFs focused on XRP also saw positive movement with total inflows of $179.6 million but trailed behind the remarkable $243.05 million influx recorded by Canary’s XRPC fund on November 14.

The contrasting fund flows underline investors’ shift toward crypto diversification amid uneasy market conditions. Factors influencing these moves include:

• Pilloried Bitcoin liquidity and fluctuating price trends.
• A turn to alternative assets as a risk spread strategy.
• The growing appeal of newer, potential high-growth cryptocurrencies.

Crypto assets other than Bitcoin are beginning to draw more attention as they continue to show promising growth. Lesser-known cryptocurrencies have increasingly become part of portfolios seeking to leverage uncertainties in the Bitcoin market.