Bitcoin ETFs Witness Third Highest Outflow Since Launch, the Other Two Times Foreshadowed Price Bottoms

As a seasoned researcher who has witnessed countless market ebbs and flows, I find myself intrigued by the recent outflow of funds from U.S.-listed Bitcoin ETFs. This $400 million exodus is reminiscent of two occasions in the past – May 1 and Nov. 4 – which, as history has shown us, have often signaled local market bottoms.

On Thursday, U.S.-based bitcoin ETFs experienced their third-largest withdrawal since inception, with approximately $400.7 million withdrawn, as per Farside’s data.

Yesterday, Bitcoin experienced a low of approximately $86,600 during trading and reached close to $92,000 as the peak. Compared to its record high on November 13 (where it surpassed $93,000), Bitcoin has undergone a roughly 6% correction.

The current price increase in bitcoin isn’t cause for alarm because when it reaches new record highs, investors often choose to withdraw their earnings. In fact, as per Glassnode data, around $15 billion has been cashed out by investors over the past three days. Remarkably, since Donald Trump was elected as the U.S. president earlier this month, bitcoin has surged more than 25%.

In the recent trend since November 7th, BlackRock’s IBIT fund has experienced an inflow of approximately $126.5 million. Conversely, Fidelity’s FBTC, Bitwise BITB, Ark’s ARKB, and two Grayscale products have witnessed outflows totaling about $74.9 million, $179.2 million, $113.9 million, and $161.7 million respectively.

Over the past days following the debut of ETFs linked to bitcoin, Thursday marked one of the three worst days for these products. Interestingly, there were two other instances when these ETFs experienced outflows exceeding $400 million: on November 4 (with a record outflow of $541.1 million) and May 1 (with an outflow of $563.7 million). On the day preceding the U.S. election, bitcoin bottomed around $67,000 but later surged to over $93,000. In contrast, the bottom on May 1 was near $60,000.

We will have to wait and see if the ETF flows signal another bottom and history repeats itself.

Conversely, Ethereum (ETH) ETFs experienced their initial withdrawal in about two weeks’ time, as investors withdrew approximately $3.2 million.