Bitcoin News Today: Institutional Exodus from Bitcoin ETFs Fuels Altcoin Inflows Amid Utility Hunt

BlackRock's iShares Bitcoin Trust (IBIT) suffered a record $523 million in daily outflows on Tuesday, marking the largest net withdrawal since the fund's January 2024 debut. The exodus coincided with a broader slump in Bitcoin (BTC), which fell below $90,000 earlier this week after hitting an all-time high of $126,800 in early October. The ETF's struggles reflect growing institutional caution as macroeconomic uncertainties, particularly around Federal Reserve rate cuts, weigh on sentiment.

The selloff followed a technical bearish signal: Bitcoin's fourth "death cross" in this cycle, where short-term price momentum dipped below long-term trends. Analysts note that while the pattern historically signals bearish momentum, it could also indicate a potential market bottom if liquidity stabilizes. However, December rate-cut odds have plummeted to 46% from near-certainty a month ago, per CME Group's FedWatch tool. This uncertainty has prompted "smart money" traders-high-profile investors tracked by platforms like Nansen-to add $5.7 million in Bitcoin short positions over 24 hours, signaling a short-term downside bias.

Institutional investors are not entirely abandoning Bitcoin, according to Vincent Liu of Kronos Research. "Record-high IBIT outflows signal institutional recalibration, not capitulation," Liu said. "Big allocators are trimming risk and testing entry points until macro signals turn clear." The fund's outflows have accelerated since late October, with $2.19 billion in net withdrawals over four weeks, despite holding $72.76 billion in assets.

Meanwhile, Bitcoin ETFs face competition from altcoin funds. Solana (SOL) and XRP ETFs have attracted $420 million in cumulative inflows since their launches, with Canary Capital's XRPC ETF alone seeing $59 million in first-day trading volume. Steven McClurg, Canary's CEO, attributed the demand to investor appetite for diversified crypto exposure, particularly in assets with "real-world utility" like Solana's fast blockchain and XRP's cross-border payment features.

The divergent flows highlight a shift in investor priorities. While Bitcoin and Ethereum ETFs face $2.9 billion in November outflows, Solana and XRP funds have drawn $289.8 million in inflows. This trend underscores a broader market reallocation toward altcoins offering tangible use cases, even as BTC and ETH remain core assets.

Looking ahead, analysts remain cautious. Tom Lee of Bitmine Immersion warned that two major market makers are facing financial deficits, compounding risks. As the Fed's December decision looms, liquidity and rate-cut clarity will likely determine whether the current selloff persists or triggers a reversal. For now, the crypto market's fragmented response-outflows in blue-chip ETFs and inflows in altcoin funds-signals a complex landscape of risk management and opportunistic positioning.