U.S.
and spot ETFs experienced significant net outflows of $3.264 billion and $4.285 billion, respectively, on Thursday, marking a sharp reversal from earlier bullish momentum. This follows a week of $2.71 billion in net inflows for Bitcoin ETFs, led by BlackRock's iShares Bitcoin Trust (IBIT), which added $2.63 billion alone [1]. The recent outflows come amid a broader market correction, with Bitcoin briefly dipping below $110,000 before rebounding to $115,570 [1].
The outflows contrast with earlier optimism surrounding an "Uptober" rally, where Bitcoin ETFs had driven record inflows since October 6. Data from SoSoValue shows that U.S. spot Bitcoin ETFs had accumulated $4.35 billion in inflows over six consecutive days, pushing
to an all-time high of $126,000 [2]. However, the recent redemptions suggest shifting investor sentiment, particularly as liquidity stress peaks on exchanges like Binance. The liquidity stress index hit 0.2867, the highest since early 2025, signaling challenges in executing large trades without price slippage [1].Crypto asset manager Bitwise predicts that Bitcoin ETF inflows could surpass the $36 billion record set in 2024 during Q4 2025, driven by institutional adoption and macroeconomic tailwinds. Morgan Stanley and Wells Fargo have recently enabled advisors to allocate client funds to crypto, unlocking new demand [3]. Bitcoin's price surge above $125,000 and the "debasement trade"-a shift toward assets like gold and Bitcoin amid currency devaluation concerns-have further fueled ETF inflows [4].
Ethereum ETFs, meanwhile, faced a net outflow of $38.1 million in the first trading week of 2025, ending six consecutive weeks of inflows [8]. BlackRock's ETHA fund, which saw $3.53 billion in 2024 inflows, reported no activity during the period [8]. The divergence between Bitcoin and Ethereum ETF flows highlights varying investor sentiment, with Bitcoin maintaining its role as a store of value while Ethereum faces questions about its growth trajectory.
Historically, Bitcoin ETF inflows have closely correlated with price movements, with strong inflows preceding all-time highs in early 2025. Conversely, Ethereum's ETF-driven rally in summer 2025-fueled by $2.27 billion in weekly inflows-coincided with a 215% price surge [6]. Analysts note that Bitcoin's sensitivity to ETF outflows has led to corrections, while Ethereum remains untested in this regard.
Recent outflows have intensified market volatility. Fidelity's FBTC ETF alone recorded a $300.4 million outflow on September 27, 2025, while BlackRock's
saw its largest single-day redemption of $332.6 million in January 2025 [9]. These movements coincided with Bitcoin's 8.5% dip below its July peak, though it later recovered to $115,000 [9].Despite the outflows, institutional demand remains robust. Bitcoin ETFs hold $158.6 billion in net assets, or 6% of BTC's market cap, while Ethereum ETFs hold $29.7 billion, or 5.1% [6]. Bitwise's CIO Matt Hougan expects ETF inflows to continue, noting that "we have 64 more days to get another $10 billion. I think we'll do that and then some" [4].
Market participants remain divided on Bitcoin's short-term outlook. While some analysts predict a rebound to $150,000 by year-end, others caution that multi-week outflows often signal market tops [1]. Glassnode data shows funding rates across derivatives exchanges have dropped to bear-market lows, but $74 billion in positions remain on exchanges [1].
Whale activity suggests long-term confidence. Over 30,000 BTC flowed into accumulation addresses in early February, and the number of addresses holding 100+ BTC has risen by 135 since January [12]. This contrasts with ETF outflows, indicating that large investors may be capitalizing on price dips [12].
As the market navigates these dynamics, the interplay between ETF flows and price action will remain a key focus. With Bitcoin ETFs poised to dominate institutional allocations, the coming months will test whether the recent outflows are a temporary correction or a harbinger of deeper market shifts.
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