Bitcoin ETFs Face Record Outflows Amid Market Volatility and Institutional Retreat

The U.S. spot bitcoin exchange-traded fund (ETF) landscape has entered a period of sustained capital flight, with BlackRock’s iShares Bitcoin Trust (IBIT) recording a record $523.2 million single-day outflow on November 12 . This marked the fifth consecutive day of net redemptions for the world’s largest bitcoin ETF, with cumulative withdrawals during the period reaching $14.3 billion. By November 15, IBIT had lost $21 billion—nearly two-thirds of the $30 billion in net outflows observed across the U.S. spot bitcoin ETF category for the month .

The exodus has pushed institutional investors to the edge of breakeven. According to Jim Bianco of Bianco Research, the average purchase price for all spot bitcoin ETF inflows since January 2024 is $90,146. With bitcoin trading near $91,000, most investors who entered via these products are now marginally profitable for the first time . However, this narrow window of gains has not halted the broader selloff. Bitcoin’s price decline of nearly 30% from its October peak above $126,000 to under $90,000 in early November has triggered a wave of institutional deleveraging .

The redemption pressure has outpaced efforts by other major players to absorb the outflows. While Franklin Templeton’s EZBC and Grayscale’s Bitcoin Mini Trust recorded inflows of $10.8 million and $139.6 million respectively, these were insufficient to offset the broader sell-off. Total net outflows across U.S. spot bitcoin ETFs reached $372.7 million on November 12, extending the redemption streak to five consecutive trading days . If the trend continues, November could become the most liquid month for these products since their January 2024 launch, with total outflows potentially exceeding the February record of $35.6 billion .

Meanwhile, the broader digital asset ETP market has seen a 27% decline in assets under management, falling from a peak of $264 billion in early October to $191 billion as of November 17 . CoinShares reported that the three-week cumulative outflows totaled $3.2 billion, driven by sharp price declines across major cryptocurrencies . This aligns with the IBIT data, which shows that the sector’s liquidity challenges are intensifying as market participants reassess risk exposure.

Against this backdrop, new institutional-grade products are emerging to address gaps in the market. BitGo, a digital asset infrastructure provider, has partnered with Deutsche Digital Assets to launch the Safello Bittensor Staked TAO ETP on the SIX Swiss Exchange. The product offers regulated exposure to Bittensor (TAO), a blockchain-based protocol for machine intelligence, through institutional custody and staking services . BitGo’s role as a BaFin-regulated custodian includes holding 100% of underlying TAO assets in segregated cold storage and managing staking operations under Germany’s stringent regulatory framework . This development highlights efforts to bridge traditional finance and decentralized technologies while maintaining compliance standards .