Bitcoin ETFs See $254M in Outflows as Market Pullback Intensifies

TLDR

• Bitcoin ETFs have experienced a sharp pullback, leaving investors underwater for the first time since the products launched.
• The flow-weighted cost basis for all US Bitcoin ETFs is near $89,600, with Bitcoin falling below this level on Tuesday.
• Bitcoin ETFs saw $254.6 million in outflows on Monday, marking the fifth consecutive day of withdrawals.
• BlackRock’s iShares Bitcoin Trust (IBIT) led the outflows with $145.6 million in withdrawals.
• Despite losses, most Bitcoin ETF holders are long-term investors, so quick exits have not been triggered.

Bitcoin ETFs have faced a sharp downturn, with the average investor now underwater for the first time since their launch. The cost basis for all US Bitcoin ETFs is close to $89,600, which Bitcoin dropped below on Tuesday. This decline has left investors facing losses, with some still in profit despite the pullback.

Bitcoin ETF Losses and Outflows

The Bitcoin ETF market has seen continued withdrawals, with a combined $254.6 million exiting the funds on Monday. BlackRock’s iShares Bitcoin Trust (IBIT) recorded the most significant outflows, totaling $145.6 million. Other Bitcoin ETFs, including Fidelity’s Wise Origin Bitcoin Fund (FBTC), ARK 21Shares Bitcoin ETF (ARKB), and Bitwise Bitcoin ETF (BITB), also saw significant losses.

These outflows represent a continuation of the downward trend, which began on November 12, with $278.1 million withdrawn. The situation worsened on November 13, when the total outflows reached $866.7 million, marking the second-worst session on record. On November 14, Bitcoin ETFs faced an additional $492.1 million in withdrawals.

Despite the negative trend, Bitcoin ETF holders have remained relatively calm, with most being long-term investors. Vincent Liu, CIO of Kronos Research, noted that long-term allocators are unlikely to sell immediately. “Being underwater doesn’t trigger quick exits for most ETF holders,” he said, emphasizing the patience of long-term Bitcoin ETF investors.

Ethereum and Solana ETFs See Diverging Trends

While Bitcoin ETFs struggle, Ethereum (ETH) ETFs have also faced steep withdrawals. On Monday, Ethereum ETFs saw $182.7 million in outflows, with the iShares Ethereum Trust ETF (ETHA) leading the decline. Ethereum ETFs have now faced multiple days of significant withdrawals, reflecting broader market unease.

In contrast, Solana (SOL) ETFs have performed well despite the overall downturn. The Bitwise Solana Staking ETF (BSOL) saw $7.3 million in new inflows on Monday, continuing its positive trend. The Grayscale Solana Trust ETF (GSOL) also experienced inflows, though on a smaller scale, with $0.9 million in new capital.

Since their launch in late October, Solana ETFs have posted consistent inflows, totaling approximately $390 million across BSOL, VSOL, and GSOL. This performance sets Solana apart from the broader ETF market, which has seen negative trends across significant assets like Bitcoin and Ethereum.