- Bitcoin ETFs in the U.S. are collectively underwater as BTC falls below $89,600.
- Over $254 million exited Bitcoin funds on Monday, led by BlackRock’s major outflows.
Investors in Bitcoin exchange-traded funds in the United States are now collectively underwater for the first time since these products were launched, according to market intelligence company Glassnode. Bitcoin plunged below $89,600 on Tuesday, causing the average entry price for all spot Bitcoin ETFs to move underwater.
Some early adopters who purchased at prices from $40,000 to $70,000 continue to be profitable; however, the average investor finds themselves nursing unrealized losses. Long-term holders are also unlikely to panic sell at this moment, as most of these investors view this as a long-term strategic allocation and not a short-term trade.
Heavy Withdrawals Continue Across Bitcoin and Ethereum Funds
Monday saw a wave of capital leaving cryptocurrency ETF products, with Bitcoin products losing $254.6 million in a single day. BlackRock’s flagship Bitcoin product had the largest outflow at $145.6 million, while some of Fidelity’s Bitcoin offerings had outflows of $12 million. This was the fifth consecutive day of outflows for Bitcoin ETFs, which began on November 12 with outflows of $278.1 million.
Outflows continued to accelerate on November 13, when outflows reached $866.7 million, the second-worst inflow figures in the short 5-month history of Bitcoin ETFs. Ethereum ETFs also had negative outflows, generating a combined $182.7 million in net outflows. Of this, outflows in BlackRock’s Ethereum product accounted for $193 million.
Market analysts have stated that the downturn was due to broader macroeconomic conditions, rather than anything unique to cryptocurrency, specifically, tight liquidity and risk-on sentiment. Investors have sought out safer assets. There will be a turnaround in digital assets whenever we see clearer signs of economic easing, softer inflation numbers, and a central bank with easier monetary policy.
Notably, Solana ETFs have gone against their trend altogether, maintaining their flawless inflow record since they came into existence in late October. The Bitwise Solana fund added $7.3 million on Monday, while Grayscale’s product added $0.9 million. Cumulative all Solana ETFs have seen around $390 million in total inflows, and both investors find interest even with a tough market of late.
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