Spot Bitcoin (BTC) exchange-traded funds are tracking for their worst month of outflows since launching nearly two years ago, as the crypto market crashes.
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So far in November, investors have pulled $3.5 billion from the U.S.-listed Bitcoin ETFs, almost equaling the previous monthly record for outflows of $3.6 billion set in February of this year. BlackRock’s (BLK) leading iShares Bitcoin Trust ETF (IBIT), which accounts for about 60% of all assets held in spot BTC ETFs, has registered $2.2 billion in redemptions in November.
The outflows come as Bitcoin experiences its worst monthly performance since the crypto industry collapsed in 2022. At $86,500 currently, the price of BTC is down 31% since its Oct. 6 record high of $126,272. The wider cryptocurrency market has also contracted sharply in recent weeks.
Crypto Sentiment
Analysts say that spot Bitcoin ETFs, which track the price movements of BTC without having to own the cryptocurrency in a digital wallet, have become synonymous with sentiment towards digital assets. The heavy outflows from those ETFs confirm that the excitement and bullishness towards crypto has now been exhausted, say analysts.
Analysts at Citigroup (C) have sought to quantify this phenomenon, stating that for every $1 billion that’s pulled from Bitcoin ETFs, prices see a roughly 3.4% decline. This dynamic helps explain Bitcoin’s recent price decline, according to Citigroup, which has a price target of $82,000 for year-end on BTC, assuming zero ETF inflows in coming weeks.
Is Bitcoin a Buy?
Most analysts don’t offer ratings or price targets on Bitcoin. So instead, we’ll look at the three-month performance of BTC. As one can see in the chart below, the price of Bitcoin has fallen 20.41% in the last 12 weeks.
