TLDR
- Bitcoin ETFs saw massive outflows, with Grayscale’s Bitcoin Mini Trust losing over $318 million in a single session.
- BlackRock’s IBIT and Fidelity’s FBTC experienced large withdrawals, totaling $256 million and $120 million, respectively.
- The outflows reflect a broader trend of risk aversion as investors pull back from high-beta assets amid rising market uncertainty.
- Market analysts suggest that reduced liquidity and increased volatility are key factors driving the large-scale redemptions.
- Bitcoin’s price dropped 6.4% to around $96,956, with analysts warning of further volatility in the short term.
Bitcoin ETFs have experienced massive outflows amid a sharp downturn in crypto markets. Investors have withdrawn significant amounts, particularly from Grayscale’s Bitcoin Mini Trust, which saw over $318 million in withdrawals in a single session. This selloff comes amid broader market uncertainty.
Grayscale’s Bitcoin Mini Trust Suffers Major Redemptions
Grayscale’s Bitcoin Mini Trust saw the largest outflow, with $318 million leaving the fund in a single session. The wave of redemptions followed a broader trend across multiple Bitcoin ETFs. BlackRock’s IBIT and Fidelity’s FBTC also reported large withdrawals, totaling $256 million and $120 million, respectively.
Investors appear to be pulling back amid rising market volatility. Kronos Research’s CIO, Vincent Liu, said this reflects a “risk-off reset.” Liu added that such moves are typical when liquidity decreases and volatility spikes.
Bitcoin ETF Outflows Reflect Broader Risk Aversion
Other Bitcoin ETFs, such as those from Ark/21Shares, Bitwise, VanEck, Invesco, Valkyrie, and Franklin Templeton, also saw substantial outflows. The combined impact marks the second-largest outflow day for Bitcoin ETFs on record. Only the February 25, 2025 event surpassed this in size, with over $1.14 billion withdrawn.
Presto Research’s Min Jung pointed to rising concerns around Federal Reserve policy and economic signals. She described the current trend as a “broad de-risking across markets.” Investors are shifting to safer assets amid signs the U.S. economy is slowing.
The outflows coincided with a sharp decline in Bitcoin’s price, which dropped by 6.4%. Bitcoin fell to around $96,956 early Friday, with analysts noting increased forced liquidations. Justin d’Anethan of Arctic Digital called the $92,000 to $95,000 range a “logical support” but warned of further volatility.
Analysts believe that Bitcoin’s price could test the lower $90,000s if this support level breaks. Some investors may find these lower levels attractive for long-term entry. However, experts caution that the market remains highly volatile due to ongoing uncertainty.
The ongoing outflows reflect the broader shift in investor sentiment toward risk aversion. The Federal Reserve’s policy path remains a critical factor for Bitcoin ETFs moving forward. Market observers note that investors’ preference for safe positions may persist as the likelihood of a Fed rate cut diminishes.
As of now, the odds of a Federal Reserve rate cut in December stand at 52.1%. This has added further pressure on Bitcoin ETFs, already grappling with increased market volatility. Despite the downturn, analysts say the structural demand for Bitcoin remains.
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