On 13 Nov, U.S. Bitcoin spot ETFs experienced the highest net outflows ever, with 866.7 million, on the second day of its inception. The Mini Trust by Grayscale and the IBIT by BlackRock were the leaders in withdrawals, not mentioning the redemptions of Fidelity and Bitwise funds.
Bitcoin Crashes to Under $100K as Liquidations Continue
The same day Bitcoin fell 2 percent and fell below $100K, the first time it had been below May. The sell-off further intensified on Nov. 14, as BTC fell as low as $94,890, a 25% drop of its high in October of $126K. Approximately 190 million of long positions were sold and pressurized ETFs.
The Moves Could Be due to Rotation, Not Collapse
It is possible that some of the outflows were due to rotation rather than panic. The same day, the U.S. initial XRP ETF offered with inflows of 250 million was launched, and Solana ETFs also drew capital. Ethereum products however experienced outflows such as Bitcoin.
ETFs that Operate as Intended in the face of Outflows
Bitcoin ETFs were redeemed without any issues although the sell-off. The total AUM remains more than $80 billion. The 3 weeks worth of withdrawals would represent only 3 percent of total holdings- probably a combination of profit-taking and rebalancing with regard to the changing macro sentiment and stricter Fed expectations.
