Bitcoin News Today: Bitcoin's Plunge and ETF Exodus Trap Crypto in Self-Feeding Sell-Off

Bitcoin fell to a seven-month low as record outflows from U.S. spot Bitcoin exchange-traded funds (ETFs) signaled a shift in capital flows, with NYDIG warning of "actual capital flight" from the crypto market. The asset traded at $83,461 as of Friday, according to CoinGecko, after shedding nearly 30% from its October peak. The selloff has accelerated amid a collapse in ETF inflows, which have turned into net outflows of $3.79 billion in November—the worst monthly performance since the products launched in January 2024.

The outflows have disproportionately hit the largest players. BlackRock's IBIT, which accounts for 63% of total ETF redemptions this month, saw $2.47 billion in net withdrawals, marking its largest weekly outflow ever. Fidelity's FBTC followed with $1.09 billion in redemptions, contributing to 91% of the sector's total outflows. Analysts attribute the exodus to a combination of profit-taking by long-term holders, leveraged positions unwinding, and macroeconomic uncertainty ahead of the Federal Reserve's December rate decision.

NYDIG's Global Head of Research, Greg Cipolaro, identified deeper structural shifts behind the selloff. "The mechanisms that drove the 2024–2025 rally have reversed," he wrote in a report, noting that spot ETFs—once a primary demand driver—now act as a headwind. The firm highlighted declining stablecoin supply, collapsing premiums for digital asset treasuries (DATs), and corporate treasury trades flipping from premiums to discounts as signs of liquidity exiting the system. For example, algorithmic stablecoin USDE lost nearly half its supply following a $0.65 price floor breach on Binance.

The reversal has triggered a feedback loop, NYDIG warned. ETF outflows amplify price declines, while falling prices further deter inflows, creating a self-reinforcing cycle. Citi Research quantified the dynamic, estimating that every $1 billion in ETF outflows correlates with a 3.4% drop in Bitcoin's price. This has pushed Bitcoin dominance—its share of the total crypto market cap—back to 58%, as investors rotate into riskier altcoins.

While the near-term outlook appears bearish, NYDIG and other analysts argue Bitcoin's long-term trajectory remains intact. Cipolaro cautioned, however, that "the cycle story-driven by flows, leverage, and reflexive behavior-is now asserting itself more forcefully," advising investors to "hope for the best, but prepare for the worst."

The market's fragility was underscored by BlackRock's IBIT, which posted a $903 million single-day outflow on Nov. 14—the largest since its launch. CoinShares reported that crypto ETPs have lost $3.2 billion in three weeks, with Bitcoin ETFs accounting for $1.38 billion of that total. Meanwhile, short Bitcoin ETPs attracted $18.1 million in inflows, reflecting growing bearish sentiment.

Bitcoin's slide has sparked debate over whether the market is entering a bear phase. Analysts noted historical parallels to past corrections, such as the 2019 government shutdown, when Bitcoin dropped 9% within five days before recovering. Yet current conditions differ: the $19 billion liquidation event on Oct. 10 broke a self-reinforcing inflow loop, shifting the narrative from growth to retrenchment.

As the crypto market grapples with its worst stretch since 2022's FTX collapse, the question remains whether these outflows signal a cyclical correction or a structural realignment. For now, Bitcoin's price action and capital flows suggest the former, but the path ahead—marked by volatility and emotional exhaustion—remains uncertain.