Bitcoin has plunged more than 33% from it’s all-time high of $126K and is now trading around $84K, after briefly dipping to $81K. The recent price declines, combined with growing outflows from Bitcoin ETFs, are raising concerns that it could see further drops.
Bitcoin ETFs See $1 Billion In Outflows
According to a report from Bloomberg, investors recently pulled nearly $1 billion from Bitcoin ETFs, marking the second-largest daily outflow for the group of 12 funds. BlackRock’s IBIT led the sell-off with $355 million withdrawn, while Grayscale’s GBTC and Fidelity’s FBTC each saw nearly $200 million in outflows.
These funds are also on pace for their worst weekly outflow since February, which highlights the growing volatility in the market.
Over the past month, investors have pulled nearly $4 billion from these ETFs, and Bitcoin has dropped about 30% in the same period. Both retail and institutional traders are watching these flows as key signals for managing risk.
According to an analysis by Alex Saunders at Citi Research, every $1 billion withdrawn from Bitcoin ETFs roughly equals to a 3.4% drop in Bitcoin. While inflows can boost Bitcoin’s price, the outflows can also worsen the price drops.
The analyst notes that with long-term investors staying cautious and new investors not in a hurry to buy, the inflows could remain slow. Bitcoin ETFs recorded over $238 million in inflows yesterday.
Record Volume Amid Market Stress
In a recent update, Bloomberg analyst Eric Balchunas highlighted a massive surge in Bitcoin ETF trading volume, reaching a record $11.5 billion in a single day. BlackRock’s IBIT fund alone accounted for $8 billion, marking its own record.
He explains that while the spike looks wild, it is normal during periods of stress. ETFs often act as “liquidity release valves,” where investors actively adjust positions.
Retail Investors Dominate
Crypto markets came under pressure after a massive liquidation event wiped out billions in leveraged positions.
Before October, investors rushed into crypto in hopes that the Trump administration would continue to help integrate the industry into mainstream finance. While institutions are now more involved in crypto than ever, retail investors still dominate the market. They hold about 75% of spot-Bitcoin ETF assets, according to Bernstein.
However, the recent outflows from Bitcoin ETFs are still small compared to their $113 billion in total assets. The interest has still not faded as ETF issuers are launching new crypto funds, with 17 ETFs debuting since October 10, with more awaiting SEC approval.
Bitcoin Faces Continued Pressure
CryptoQuant analysts note that whale activity in Bitcoin futures remains absent, and even retail trading, which has been the main driver recently, is thinning. Trading volumes are low, and liquidity is also weakening.
So, unless institutional demand returns or retail participation picks up, Bitcoin is likely to remain under pressure, with little chance of a strong near-term rebound.
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