Signs of institutional withdrawal? Continued fund outflows from Bitcoin and Ether ETFs.
The outflow of funds from Bitcoin (BTC) and Ethereum (ETH)-based spot ETFs continues. Analysts say this signals a loss of interest from institutional investors.
On-chain analytics platform Glassnode reported this week that the 30-day simple moving average net inflows for Bitcoin and Ethereum spot ETFs in the United States have been negative since early November. The report explained that this indicates institutional investors are beginning to partially withdraw from the cryptocurrency market, and is in line with the overall trend of liquidity contraction in the cryptocurrency market.
ETF fund flows typically lag the spot market by a beat. Indeed, Bitcoin and Ethereum prices have been declining since mid-October, and ETF inflows have followed suit. Experts believe ETF trends reflect institutional investor sentiment.
According to investment data firm CoinGlass, Bitcoin ETFs have seen net outflows for the past four consecutive trading days. However, BlackRock's flagship product, the iShares Bitcoin Trust (IBIT), was an exception, recording a small inflow last week.
BlackRock ETFs are the only positive sign
Market research firm The Covey Letter released a report Tuesday stating that cryptocurrency funds experienced net outflows of approximately $952 million (approximately KRW 1.3884 trillion) over the past week. In sum, net outflows have occurred in six of the last ten weeks.
Nevertheless, BlackRock's IBIT has established itself as a dominant force in the ETF industry this year. Since its launch, it has attracted a staggering $62.5 billion (approximately 91 trillion won), outpacing its competitors.
Bloomberg ETF analyst Eric Balchunas noted in his analysis on Saturday that despite its negative returns this year, IBIT ranks sixth in Bloomberg ETF inflows. He emphasized that the fact that IBIT attracted more inflows even as the gold ETF SPDR Gold Shares (GLD) surged 64% is a "very positive sign" for the long term. "If you can attract $25 billion in a bad year, you can expect even more in a good year," he said.
Market correction, continued tightening of liquidity
This partial outflow of institutional funds appears to have been influenced by profit taking ahead of the end of the year and increased market uncertainty. While institutional inflows through ETFs were the primary driver of market gains this year, the recent trend has reversed course, fueling an overall decline in liquidity.
However, the fact that some ETFs, particularly IBIT, are still seeing capital inflows suggests that institutional long-term confidence in digital assets has not completely vanished. After the market passes through a period of short-term uncertainty, the situation could turn around.
๐ Market Interpretation
Institutional funds continue to flow out of Bitcoin and Ethereum ETFs, a result of a combination of year-end market corrections and depressed sentiment. Liquidity appears to be tightening.
๐ก Strategy Points
With ETF outflows continuing, it's important to be mindful of short-term volatility. However, the steady inflow of BlackRock ETFs demonstrates that a strategic approach centered on high-quality institutional ETFs remains valid.
๐ Glossary
- ETF (Exchange Traded Fund): A fund listed on the stock market that tracks the price of real assets such as Bitcoin.
- Net outflow/net inflow: The net flow of funds flowing out or in from the fund.
- IBIT: Bitcoin spot ETF product managed by BlackRock
๐ก Want to know more? AI-prepared questions for you:
A. The fact that Bitcoin and Ethereum ETFs have seen net outflows since early November signals a partial withdrawal of institutional investors from digital asset investments. This is also linked to the overall liquidity contraction in the cryptocurrency market.
A. BlackRock's IBIT has maintained fund inflows even amidst a market-wide correction. Notably, despite negative annual returns, it ranked 6th in industry inflows, attracting more funds than gold ETFs.
A. ETFs are an indicator of institutional investor market participation. If there are significant outflows, this could lead to a deterioration in investor sentiment and increase selling pressure. This could lead to a decline in Bitcoin prices.
A. $62.5 billion is equivalent to approximately 91 trillion won. This is larger than all other Bitcoin ETFs on the market combined.
A. Following the year-end adjustment and the resolution of uncertainty, there is a possibility that ETF inflows will resume, along with a bullish outlook. In particular, changes in the new regulatory environment or interest rate policy in the US could act as variables.
TP AI Precautions
This article was summarized using a TokenPost.ai-based language model. Key points in the text may be omitted or inaccurate.
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