Exchange-traded funds (ETFs) that invest in Bitcoin are in their worst month of redemptions since their inception, after investors pulled about $3.5 billion from U.S.–listed Bitcoin funds in November.
Data compiled by Bloomberg shows outflows from these Bitcoin ETFs in November nearly match the previous record of US$3.6 billion, which was set in February.
The largest vehicle in this category, IBIT (managed by BlackRock and representing about 60 % of the segment’s assets), alone recorded redemptions of around $2.2 billion so far this month.
Industry analysts say the heavy outflows reflect weakening institutional demand for digital-asset exposure just as macro and crypto-specific risks accumulate.
A combination of wavering risk appetite, uncertainty around U.S. interest-rate policy and an increasingly crowded market of competing crypto funds is weighing on flows.
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The shrinkage in fund capital is also putting additional pressure on Bitcoin’s price and liquidity. As funds redeem shares, managers may need to sell underlying holdings, reducing available float and amplifying downside risk in a market already challenged.
Even though Bitcoin remains a headline asset in the crypto market, Bloomberg reports its connection to traditional risk assets appears stronger.
Thus far this year, the ETF outflows coincide with signs of a correction in speculative and technology-oriented investments.
Some market participants interpret the current pause in flows as more than a momentary setback rather, the start of a deeper phase of retrenchment by institutional investors.
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