Bitcoin News Today: Institutional Exodus Triggers $320M Crypto Liquidations as ETFs Bleed BlackRock’s Shift to Coinbase Amid Market Volatility

The crypto market experienced a dramatic $320 million in liquidations on August 1, as Bitcoin faced a sharp selloff and institutional investors withdrew funds from exchange-traded funds (ETFs). The outflows, driven by major players like BlackRock, led to widespread position closures across futures and options markets, with over 161,000 traders seeing their positions forcibly liquidated [1]. This marked one of the second-largest one-day ETF outflows in history, significantly impacting Bitcoin and Ethereum [1].

Key players in the institutional space reallocated assets during this period. BlackRock, among others, moved $664 million in Bitcoin and Ethereum to Coinbase Prime, a move signaling a shift in liquidity strategies amid the mass outflows [1]. This reallocation not only affected the underlying crypto assets but also triggered volatility in derivatives markets, highlighting vulnerabilities in liquidity networks tied to institutional activity [1].

The selloff was not limited to Bitcoin. Altcoin-focused ETFs such as BitBoard (BB), InfinityBit Token (IBIT), and Hedera (HBAR) saw significant redemptions, as investors moved away from speculative crypto exposures. BB, which had previously seen modest inflows in July, recorded one of the highest outflows, though exact figures were not disclosed [1]. The coordinated nature of the liquidations suggests a broader rebalancing of portfolios among ETF participants, as risk appetite diminished amid heightened market volatility [1].

The broader economic environment played a key role in the selloff. A weak U.S. jobs report and rising concerns about a potential recession contributed to the widespread flight from risk across global markets. As a result, both institutional and retail investors began to retreat from crypto, further deepening the decline in Bitcoin and Ethereum prices [2].

This episode underscores the influence institutional investors can have on market stability and liquidity. The large-scale reallocation of capital and the subsequent liquidation event demonstrate how rapidly sentiment can shift in the crypto market, particularly when macroeconomic conditions are uncertain. Regulators and market observers are likely to pay closer attention to such trends, as they reflect the growing interdependence between institutional behavior and overall market dynamics [1].

Source:

[1] XT.com, [https://www.xt.com/en/blog/post/top-3-altcoin-etfs-bleed-320m-in-a-day-are-weeks-of-inflows-wiped-out](https://www.xt.com/en/blog/post/top-3-altcoin-etfs-bleed-320m-in-a-day-are-weeks-of-inflows-wiped-out)

[2] CoinDesk, [https://www.coindesk.com/](https://www.coindesk.com/)