Digital Asset ETFs Face $3.2B Outflows Amid Bitcoin Sell-Off and New Product Launches

Bitcoin exchange-traded funds (ETFs) are experiencing unprecedented outflows in November, with BlackRock’s iShares Bitcoin Trust (IBIT) leading the exodus. The fund recorded $523 million in redemptions on a single day—the largest since its January 2024 launch—contributing to $2.96 billion in net outflows for the month . This figure, already the second-worst monthly performance for spot Bitcoin ETFs, could surpass the $3.56 billion outflows seen in February if selling persists . Despite November historically being Bitcoin’s strongest month (averaging 41.22% returns), the ETFs continue to bleed assets, reflecting broader market uncertainty .

The broader digital asset ETP market is also under pressure. CoinShares reports $3.2 billion in cumulative outflows over three consecutive weeks, reducing total assets under management in digital asset ETPs by 27% from their early-October peak of $264 billion to $191 billion . This decline follows sharp price drops across major cryptocurrencies, underscoring investor caution amid volatile conditions .

Amid the outflows, new product launches highlight diverging strategies in the crypto market. Safello, a Nordic cryptocurrency exchange, has listed its physically backed and staked TAO ETP on the SIX Swiss Exchange . The product, trading under the ticker STAO, offers investors direct exposure to Bittensor’s TAO token while capturing on-chain staking rewards. By reinvesting these rewards after deducting service fees, the ETP aims to generate compounding returns, combining price appreciation with yield generation

. The structure addresses growing demand for regulated, yield-producing crypto products that eliminate the need for investors to manage custody or staking mechanisms themselves .

Safello’s venture into staked ETPs aligns with its revenue diversification strategy, as the company earns a share of the ETP’s assets under management . However, the long-term success of this product remains contingent on market demand for TAO exposure, which has yet to be tested in a sustained downturn. The launch also reflects broader industry trends toward institutional-grade crypto products that balance accessibility with regulatory compliance .

The contrast between Bitcoin ETF outflows and the emergence of yield-generating ETPs underscores shifting investor priorities. While spot Bitcoin ETFs have been a primary driver of the asset’s momentum in 2025, their recent performance challenges the narrative of crypto as a reliable store of value . Meanwhile, products like Safello’s STAO ETP cater to investors seeking both capital appreciation and income, potentially attracting a different segment of the market .

Historical context complicates the current sell-off. November has traditionally been a bullish period for Bitcoin, with average returns of 41.22% over past cycles . The current divergence between expectations and reality raises questions about the sustainability of crypto’s recent growth trajectory. Standard Chartered’s digital assets research head, Geoff Kendrick, noted that ETF flows were central to Bitcoin’s momentum in 2025 , yet November’s outflows suggest a reassessment of risk-return profiles amid macroeconomic pressures.

The broader implications extend beyond individual products. CoinShares’ data reveals a 27% decline in digital asset ETP AUM since October, signaling a potential correction in a market that saw rapid inflows earlier this year . This trend could influence regulatory approaches to crypto products, particularly as authorities weigh the risks of speculative flows against the benefits of innovation. For investors, the volatility highlights the importance of diversification and risk management in an asset class still maturing .