U.S.-based spot bitcoin exchange-traded funds (ETFs) experienced a significant combined daily outflow of $326.4 million on Monday, marking the largest single-day withdrawal since late September. Despite the broad market retreat, BlackRock’s iShares Bitcoin Trust (IBIT) continued to attract new capital, maintaining a streak of positive inflows amid volatile price conditions.
Key Takeaways
- Spot bitcoin ETFs in the U.S. recorded a net outflow of $326.4 million on Monday, the largest since September 26.
- BlackRock's IBIT was a notable exception, securing new investments and extending its inflow streak to 10 consecutive trading days.
- While IBIT's inflows persist, the daily amounts have decreased significantly in the last two sessions compared to previous weeks.
- The overall market outflow coincides with a period of price correction for bitcoin and weakening performance during U.S. trading hours.
Market-Wide ETF Outflows Signal Investor Caution
Data compiled by Farside Investors revealed a substantial shift in sentiment among spot bitcoin ETF investors at the start of the week. The collective withdrawal of over $326 million from these products indicates that some market participants are reducing their exposure as the price of bitcoin faces downward pressure. This level of outflow has not been seen in several weeks, suggesting a potential short-term cooling of the aggressive buying that characterized the market earlier in the year.
This trend of redemptions affected numerous funds across the sector. Many ETF issuers either recorded net outflows or reported zero new flows, highlighting a widespread pause in demand. The outflows follow a period of significant price decline for bitcoin, which recently experienced a correction of approximately 20% after reaching a new all-time high.
A Day of Significant Withdrawals
The $326.4 million net outflow on Monday represents one of the most significant single-day redemptions for the U.S. spot bitcoin ETF market since its inception, reflecting a notable shift in investor behavior.
BlackRock's IBIT Remains an Outlier
In stark contrast to the broader market, BlackRock’s iShares Bitcoin Trust (IBIT), the largest spot bitcoin ETF by total assets, continued to attract investor capital. The fund successfully logged its tenth consecutive day of positive inflows, demonstrating resilient demand even as competitors struggled.
Over the past two trading sessions, IBIT accumulated a total of $134 million in new investments. However, the pace of these inflows has noticeably slowed. According to Farside data, the most recent sessions saw inflows of $74.2 million and $60.4 million, respectively. These figures are considerably lower than those seen in the preceding eight sessions, where daily inflows consistently surpassed the $200 million mark.
Slowing Momentum Amid Market Correction
The deceleration in IBIT's inflow rate suggests that even the most popular fund is not entirely immune to the broader market sentiment. While it continues to attract capital, the reduced volume of new investment may reflect a more cautious approach from buyers in the current environment. This trend aligns with historical patterns observed in the market.
"Analysis from Glassnode has previously shown that IBIT’s fund flows have historically correlated with bitcoin's price movements, with inflows typically increasing during price rallies and slowing or reversing during declines."
The fund's ability to maintain positive flows during a significant market correction distinguishes it from its peers. While other ETF providers have faced redemptions, IBIT’s consistent, albeit smaller, inflows suggest a base of investors with a longer-term conviction or those using the price dip as a buying opportunity.
Bitcoin Performance and Trading Volume Analysis
The recent ETF outflows align with a noticeable weakening of bitcoin's performance, particularly during U.S. trading hours. Data from Velo indicates a significant shift in this trend over the past month. In early October, bitcoin's price had registered a gain of over 10% during U.S. market hours for the month. That figure has since declined sharply to just 1.7%.
Global Trading Session Comparison
Despite the slowdown, bitcoin's performance during U.S. hours remains stronger than in other regions. Over the past month, trading sessions in both Europe and Asia have posted negative returns for the digital asset, highlighting a relative strength for bitcoin in the American market.
Broader Crypto Market Trends
The recent market activity is also reflected in overall trading volumes. A report covering September's activity showed that combined spot and derivatives trading volumes in the crypto market fell by 17.5%. This decline follows a consistent seasonal pattern observed over the last four years, where trading activity tends to decrease in September.
Despite the short-term price volatility and outflows, some on-chain metrics suggest underlying structural demand remains intact. Analysts from firms like Glassnode and CryptoQuant have pointed to several key indicators:
- Whale Accumulation: Large holders of bitcoin, often referred to as 'whales', have continued to accumulate the asset.
- Stablecoin Supply: The supply of USDT (Tether), a key stablecoin, has been rising, which can indicate capital is on the sidelines ready to be deployed into crypto assets.
- Persistent ETF Inflows: Despite recent outflows, the broader trend for ETFs since their launch has been overwhelmingly positive, pointing to sustained institutional and retail interest.
These factors suggest that while the market is currently undergoing a deleveraging event that has cleared out speculative positions, a foundation of long-term conviction may be anchoring the asset price from more severe declines.
