Bitcoin News Today: ETF Outflows Spark Bitcoin's Plunge, Fueling More Redemptions

Global crypto exchange-traded products (ETPs) faced a record $1.9 billion in outflows last week, marking the third-worst weekly exodus since 2018, according to CoinShares. The selloff has intensified as U.S.-listed spot Bitcoin (BTC) and Ethereum (ETH) ETPs posted historic withdrawals, with Bitcoin ETFs alone bleeding $3.79 billion in November, surpassing the prior monthly outflow record of $3.56 billion set in February. BlackRock's IBIT, the largest Bitcoin ETF, accounted for over $2 billion of these redemptions, while Ether ETFs saw $1.79 billion in outflows according to Seeking Alpha.

The exodus has compounded a broader market slump, according to the Kobeissi Letter, with total assets under management (AUM) in crypto ETPs shrinking 27% to $191 billion, a "structural decline". Bitcoin and Ethereum, the two largest cryptocurrencies by market value, led the outflows, with BTC funds losing $1.4 billion and ETH funds shedding $689 million last week. The selling pressure has pushed Bitcoin below $85,000 - its worst monthly performance since the 2022 crypto collapse - and near a critical technical level. Analysts note that Bitcoin remains in a bear market as long as it trades below its 50-week exponential moving average (EMA) of $10,000.

The selloff has been exacerbated by a self-reinforcing cycle: ETF outflows amplify price declines, which in turn trigger further redemptions. Citi Research estimates that every $1 billion in ETF outflows correlates with a 3.4% drop in Bitcoin's price. This dynamic has left the market vulnerable to cascading liquidations. Jacob King of SwanDesk warned that if Bitcoin falls below MicroStrategy's average buy price of $80,000, forced selling could drive prices toward $10,000.

Amid the turmoil, newer ETPs for altcoins like Solana (SOL) and XRP have attracted inflows, offering a rare bright spot. Solana ETFs drew $300.46 million, while XRP funds pulled in $410 million. However, these gains are overshadowed by the broader market's struggles. Retail and institutional risk appetite has waned, with Bitcoin ETFs posting $903 million in net outflows on Nov. 21 - the second-largest single-day withdrawal since their January 2024 debut.

Market participants are split on Bitcoin's near-term outlook. Lark Davis outlined three scenarios: a prolonged bear market, a short-lived rally testing the 50-week EMA, or a year-end rebound fueled by easing macroeconomic conditions. Nick Ruck of LVRG Research called the current outflows a sign that "the euphoria from earlier this year has been fully exhausted" according to Bloomberg. With the Federal Reserve's December policy meeting looming and Bitcoin trading 30% below its October peak, the path forward remains uncertain.