Bitcoin and Ethereum ETFs Suffer Millions In Outflows
- Bitcoin and Ethereum ETFs face $797M outflow as investors pull back during market stress.
- Fed’s hawkish tone boosts dollar strength, sending crypto markets deeper into fear territory.
- Analysts call the ETF exits a tactical reset, warning volatility will stay high near term.
Bitcoin and Ethereum exchange-traded funds in the United States recorded heavy withdrawals on Tuesday as investors reduced exposure to risk assets. The combined outflow reached $797 million, marking the largest daily loss since August. Market participants shifted positions following a broad selloff in digital assets triggered by global financial uncertainty and tightening liquidity conditions.
Data from SoSoValue showed that spot Bitcoin ETFs saw outflows of $577.74 million. Fidelity’s FBTC fund recorded $356.6 million in outflows, Ark and 21Shares’ ARKB lost $128 million, and Grayscale’s GBTC saw $48.9 million withdrawn. Seven Bitcoin funds reported negative flows. The group has now faced five straight days of redemptions, totaling $1.9 billion in exits.
Ethereum ETFs See $219M Outflow as Fed Signals Tight Policy
Spot Ethereum ETFs also recorded significant withdrawals. The total outflow reached $219.37 million. BlackRock’s ETHA reported the largest single-day exit of $111 million. Grayscale and Fidelity funds followed with moderate redemptions. Solana ETFs were the only ones to attract fresh capital. They added $14.83 million, marking the smallest inflow since their launch last week.
Rachael Lucas, an analyst at BTC Markets, described the outflows as a turning point in institutional behavior. She said this represents a strategic repositioning rather than a panic exit. Lucas explained that major investors are managing risk based on current macroeconomic signals, which continue to weigh on speculative assets such as cryptocurrencies.
Recent remarks from Federal Reserve Chair Jerome Powell have intensified selling pressure. Powell indicated that an interest rate cut in December is unlikely. His statement pushed the U.S. dollar index above 100, strengthening the dollar and reducing appetite for high-risk instruments. As a result, digital assets have followed the same path as technology equities, both under pressure from tighter financial conditions.
Lucas said the correlation between crypto and the tech sector remains strong. She noted that valuations in the artificial intelligence market appear stretched and that any correction could spill into cryptocurrencies through their link with the Nasdaq index. Analysts added that this connection heightens volatility and amplifies investor responses to macroeconomic shifts.
Crypto Fear Index Plunges
Yesterday, the Crypto Fear and Greed Index dropped sharply to 21, signaling extreme fear. Derek Lim, research lead at Caladan, stated that ETF outflows are reinforcing this anxiety. He added that comments from Powell have strengthened the dollar and encouraged a risk-off stance across global markets.
Source: Alternative
Lim also pointed to concerns surrounding a potential U.S. government shutdown, which adds another layer of uncertainty. Despite the current pressure, he believes the broader bullish structure of the cryptocurrency market remains intact. Lim said that while delayed rate cuts are negative in the short term, they do not change the long-term direction toward monetary easing.
Related: Crypto Funds Attract $921 Million as Rate-Cut Hopes Rise
According to Lim, Bitcoin’s 21.5% drop from $125,000 to $99,000 is mild compared with the 31% decline earlier this year caused by tariff concerns. He said volatility is likely to continue as investors adjust portfolios ahead of future policy moves. Market participants remain cautious but have not abandoned long-term positions entirely.
Lucas warned that if ETF outflows continue, further price declines are possible. She said reduced liquidity could lead to wider price swings and technical breakdowns. Recovery would depend on a softer dollar, signs of rate cuts, or new market narratives such as growth in real-world asset tokenization. Until then, investors appear content to wait for a more stable macro backdrop before increasing exposure to digital assets.
