Key Points
- Bitcoin ETFs are experiencing their worst month of outflows, with investors withdrawing $3.5 billion in November.
- BlackRock’s IBIT, the largest Bitcoin ETF, has seen $2.2 billion in redemptions alone.
- The massive withdrawals are pushing down Bitcoin’s price, contributing to its worst month since 2022.
- These ETFs create a feedback loop in which outflows lead to price declines, which trigger further outflows.
Investors are yanking billions of dollars out of Bitcoin exchange-traded funds (ETFs), sending the funds spiraling toward their worst month ever. This massive cash exodus is piling heavy pressure on an already weakened crypto market.
So far in November, investors have pulled a staggering $3.5 billion from the popular US-listed Bitcoin ETFs. This is nearly a record, just shy of the $3.6 billion withdrawn in February. The biggest fund, BlackRock’s IBIT, has been hit the hardest, losing $2.2 billion on its own. Unless things turn around dramatically, it will be the fund’s worst month since its launch.
This investor retreat is hammering Bitcoin’s price, which is also on track for its worst monthly performance since the spectacular crypto industry collapse of 2022. The “euphoria from earlier this year has been fully exhausted,” said Nick Ruck, a director at LVRG Research.
The ETFs, which debuted in January 2024, have created a powerful feedback loop. When money flows in, prices rise, attracting more buyers. But when money flows out, prices fall, causing more panic selling. Analysts at Citi estimate that for every $1 billion pulled from the ETFs, Bitcoin’s price drops by about 3.4%.
This isn’t just a crypto problem. Investors are growing cautious across the board, pulling back from other risky bets such as AI and meme stocks. The S&P 500 is also poised for its worst month since March.
Experts believe this is a broad “phase of consolidation,” where investors are shedding their most speculative assets, and crypto is feeling the pain.
