Bitcoin ETFs listed in the U.S. are experiencing their worst monthly outflows in nearly two years, adding further pressure to the already sluggish cryptocurrency market. Data shows that investors have withdrawn $3.5 billion from these funds in November alone, nearly matching the record $3.6 billion monthly outflow set in February.
Among them, BlackRock’s Bitcoin ETF-iShares (IBIT.US), which accounts for about 60% of the category’s total assets, has seen redemptions of $2.2 billion this month. Unless a significant reversal occurs, this could mark its worst monthly performance to date.
The outflows coincide with Bitcoin facing its toughest monthly decline since the 2022 crypto market crash, which was triggered by the collapse of Sam Bankman-Fried’s FTX and a wave of industry-wide bankruptcies. Despite improved global policy conditions this year, the broader cryptocurrency market has recently contracted sharply.
Nick Ruck, Director at LVRG Research, noted, "The outflows from IBIT confirm that the market frenzy seen earlier this year has completely dissipated." Bitcoin briefly dropped to $80,553 last Friday before recovering slightly over the weekend. As of the latest update, the cryptocurrency is trading at $86,020, still down 8% year-to-date.
Since their launch in January 2024, spot Bitcoin ETFs have become a key sentiment indicator for the crypto market, reshaping capital flows into and out of the asset class. This has created a self-reinforcing feedback loop: inflows accelerate during price rallies, while outflows intensify during declines.
Citi’s research team quantified this effect, finding that every $1 billion outflow from Bitcoin ETFs corresponds to an average 3.4% price drop—and vice versa. Analyst Alex Saunders suggested this mechanism explains Bitcoin’s recent pullback. He previously warned that if ETF inflows stagnate, Bitcoin could fall to $82,000 by year-end. Given the current multi-billion-dollar outflows, further downside remains possible.
Linh Tran, Market Analyst at XS.com, commented, "Spot ETFs were the driving force behind Bitcoin’s record highs in the first half of the year. Now, the shift from sustained inflows to net outflows among institutional investors is significantly weighing on prices."
Notably, Bitcoin ETFs saw a record $11.5 billion in daily trading volume last Friday, with BlackRock’s IBIT alone accounting for $8 billion. However, the funds still recorded a net outflow of $122 million that day. Ruck observed that while the high trading volume briefly signaled demand, IBIT’s continued redemptions reflect "a clear shift in institutional preference away from the industry’s leading product, indicating market confidence has yet to fully recover." BlackRock declined to comment.
The broader financial market context also shows a retreat in high-risk assets, from AI stocks and meme stocks to high-volatility momentum trades. The S&P 500 is experiencing its worst monthly performance since March, while Bitcoin’s short-term correlation with tech stocks recently hit an all-time high.
Lori Calvasina, Head of U.S. Equity Strategy at RBC Capital Markets, wrote in a report, "Bitcoin’s volatile movements since this summer have been a signal of broader market fatigue. While the exact trigger for the decline remains unclear, stabilization in such assets could help ease some of the tension in U.S. equities."