Spot Bitcoin ETFs Experience $358M Outflow: Are Investors Leaving BTC Behind?

Spot Bitcoin ETFs Experience $358M Outflow: Are Investors Leaving BTC Behind?

Summary:
Recent outflows from spot Bitcoin exchange-traded funds (ETFs) have raised concerns among investors, particularly after Bitcoin's price fell significantly. Despite a 31% drop from its peak, data suggests that institutional investors may still have confidence in Bitcoin, indicating that a trend change might not be imminent.

Key Takeaways:

The $358 million outflow from Bitcoin ETFs and a 31% price decline have fueled concerns, yet there’s evidence that institutional investors are not abandoning Bitcoin.
Bitcoin's fluctuating correlation with gold and its consistent volatility imply that its price dynamics remain sound despite short-term pressures on the market.

After experiencing a price dip to around $85,000 on Monday, Bitcoin gained 3% on Tuesday. The notable outflows from spot Bitcoin ETFs suggest a decrease in institutional demand since a significant drop on October 10. This trend may impact the prospects of Bitcoin trading above $100,000 by the end of the year.

Spot Bitcoin ETFs daily net flows, USD. Source: Coinglass

The spot Bitcoin ETFs saw $358 million in net outflows on Monday, the largest single-day withdrawal seen in over three weeks. This has led to speculation that institutional investors may be reconsidering their positions after Bitcoin fell below the critical psychological support level of $90,000.

Importantly, Bitcoin is currently priced 31% lower than its all-time high of $126,219, which may signal the conclusion of a bullish trend that extended into October.

Source: X/__forcethehabit

Per insights shared by X user ‘forcethehabit’, the recent drop in Bitcoin's price may not indicate a major trend shift. This analysis points to delayed interest rate cuts by the US Federal Reserve and a longer-than-expected reduction in its balance sheet. It also notes that most institutional capital entered through ETFs and corporate reserves, while a shift toward riskier assets has not yet occurred.

Bitcoin’s Correlation with Gold: A Mixed Picture

Bitcoin's relationship with gold prices can help determine if it is seen as a safe haven or as a riskier asset. The "digital gold" narrative has been vital in driving Bitcoin's growth throughout 2025.

Bitcoin/USD (blue) vs. gold/USD (red). Source: TradingView

More crucial than Bitcoin's 48% underperformance compared to gold since July is how it tracks the weekly movements in gold prices. Since May, the 60-day correlation metric has fluctuated between positive and negative, indicating that Bitcoin's trends do not consistently align with those of gold. Traders, however, are likely disappointed following Bitcoin's fall below the $110,000 mark.

While this data may appear to signal a bearish sentiment, it is significant that the 31% drop in Bitcoin's price since October has not influenced the correlation metric. This suggests that institutional investors have not drastically changed their risk outlook. Despite gold retaining its status as the largest store of value, with a market cap of about $30 trillion, Bitcoin may still carve out its niche as an independent financial system.

It may be premature to conclude that institutional money has completely exited Bitcoin based solely on a 10-week correction. Notably, Bitcoin has outperformed the S&P 500 index by 7% in the last 18 months. Although this performance may seem minor, Bitcoin’s options risk profile aligns closely with that of Nvidia (NVDA US) and Broadcom (AVGO US), two of the top eight companies globally by market value.

Bitcoin 3-month options implied volatility. Source: Laevitas.ch

Bitcoin options' implied volatility reached 53% in November, similar to the current levels seen for Tesla (TSLA US). Such volatility often rises in response to anticipated sharp price movements, leading to increased premiums on call and put options. Market makers typically reduce risk exposure when large price swings are expected, but this does not inherently indicate a bearish sentiment among investors.

As it stands, there are no signs suggesting that institutional investors have abandoned their hopes for Bitcoin to reach $100,000 soon. Correlation and volatility metrics imply that Bitcoin's price behavior has not significantly changed post the 30% decline. Hence, a few days of ETF net outflows should not be overstated. With the recent liquidity influx from the US Federal Reserve still to reflect in the markets, it is too early to evaluate Bitcoin's performance conclusively.