Bitcoin ETFs See $636 Million Outflow as October Turns Red

Bitcoin ETFs See Sharp Outflows, Erasing October Gains

U.S. spot Bitcoin ETFs experienced a significant outflow of $635.6 million on Thursday, according to Decrypt’s ETF tracker. This single-day withdrawal wiped out nearly 60% of the approximately $1.07 billion the funds had accumulated over the preceding three sessions. The outflow marked the largest single-day exit for the month, surpassing the $484.9 million withdrawal on October 7, which had previously been the worst since June.

October Reverts to Negative Territory for Bitcoin ETFs

The sharp reversal pushed the performance of Bitcoin ETFs back into negative territory for October. After reaching a net inflow of roughly $460 million for the month on Wednesday, the funds are now down approximately $176 million. Cumulative net inflows since their launch have decreased to $57.8 billion, with total net assets standing at $100.2 billion.

Ethereum and Solana ETFs Also Face Outflows

Ethereum ETFs followed a similar trend, shedding $110.6 million on Thursday, a day after breaking a five-day streak of outflows. This brings their total losses for October to roughly $1.18 billion. Solana ETFs saw outflows of $8.9 million, contributing to a monthly total of about $68 million in outflows, with only two days of inflows recorded in October.

Understanding Spot Crypto ETFs

Spot crypto ETFs are exchange-traded funds that hold the underlying digital asset, such as Bitcoin or Ethereum, and trade on stock exchanges like conventional shares. This structure allows investors to gain exposure to cryptocurrencies through a standard brokerage account without the need to directly purchase or manage the digital assets themselves.

ETF Inflows and Investor Sentiment

Bitcoin funds, which debuted in January 2024, have since attracted $57.8 billion in net inflows. Ethereum funds, launched in July of the same year, have garnered $12.7 billion, while Solana funds were introduced late last year. Given that issuers report flows daily and a significant portion of the capital originates from institutions and financial advisors, these figures are considered a key indicator of investor sentiment in the crypto market.

Market Context and Fed Meeting

Thursday’s selling pressure coincided with a broader downturn across financial markets. Oil prices surged above $111 a barrel, while AI stocks declined, pulling down the S&P 500 and global markets. Investors are also looking ahead to the Federal Reserve’s next meeting on October 27-28, with expectations of a “hold” on interest rates, a scenario generally viewed favorably for risk assets like cryptocurrencies.

Crypto Prices Remain Stable Amidst Outflows

Despite the substantial ETF outflows, cryptocurrency prices showed little movement. Bitcoin traded near $81,460 on Friday, remaining flat over the preceding 24 hours and down 0.4% for the week. Ethereum dipped 0.2% to approximately $2,400, and Solana slipped 0.3% to roughly $104. However, 30-day declines are more pronounced, with Bitcoin down 4.8%, Ethereum down 11.4%, and Solana down 10.4%.

Market Cap and Trading Volume

The total cryptocurrency market capitalization held steady at around $2.85 trillion, while trading volume decreased by 20% to $67.1 billion. Analysts suggest that Bitcoin has entered a “wait-and-see” mode, which may not necessarily be detrimental to the market.

Prediction Market Sentiment

Traders on Myriad, a prediction market operated by Decrypt’s parent company Dastan, have reduced their expectations for an October breakout. They now assign Bitcoin a 17% chance of surpassing $87,500 before the month’s end, down from 20% the previous day, and a 9% probability of reaching $90,000. Conversely, the odds of a decline to $77,500 are placed at 32%. Sentiment in Myriad’s open-ended markets shows more optimism for other cryptocurrencies, with users giving Ethereum a 61.3% chance of reaching $3,000 before falling to $1,500, and Solana a 54.9% chance of hitting $160 before dropping to $40.