On Tuesday, more than $1 billion was withdrawn from Bitcoin exchange-traded funds, marking the largest single-day withdrawal since these investment products became available last January.
The Fidelity Wise Origin Bitcoin Fund experienced the biggest drop in investment, followed closely by the iShares Bitcoin Trust ETF, according to Bloomberg data. Bitcoin prices have recently struggled as investors move away from higher-risk assets during uncertain market conditions.
These Bitcoin funds lost approximately $2.1 billion over six straight days—the longest period of continuous withdrawals since June last year.
The price of Bitcoin, the world's main digital currency, has fallen considerably, dropping to its lowest point since mid-November after reaching record highs earlier this year. Other cryptocurrencies declined as well, with an index that tracks major digital tokens heading toward its biggest four-day decrease since early August.
Despite investors leaving Bitcoin funds, many took advantage of recent stock market declines by adding nearly $7 billion combined to the Invesco QQQ Trust and SPDR S&P 500 ETF Trust on the same day.
Geoff Kendrick, global head of digital assets research at Standard Chartered, explained: "Digital assets remain heavily influenced by retail investor activity, despite institutional investment over the past 12 months. This makes them different from stocks and bonds. I believe this means the average investor has less financial capacity to withstand losses, which suggests more downward pressure ahead."
Kendrick expects Bitcoin to fall further—possibly to around $80,000—at which point he plans to purchase it during the price dip.
Matthew Sigel, VanEck's head of digital-asset research, suggested these record outflows likely result from hedge funds abandoning a popular trading approach called the basis trade. This strategy takes advantage of price differences between immediate purchases and future contracts markets. Some investors have used these ETFs to benefit from cryptocurrency price swings or balance short positions in derivatives.
"This strategy involves buying Bitcoin spot (often through ETFs) and shorting Bitcoin futures simultaneously to secure a low-risk return," Sigel explained.
The Fidelity Wise Origin Bitcoin Fund experienced the biggest drop in investment, followed closely by the iShares Bitcoin Trust ETF, according to Bloomberg data. Bitcoin prices have recently struggled as investors move away from higher-risk assets during uncertain market conditions.
These Bitcoin funds lost approximately $2.1 billion over six straight days—the longest period of continuous withdrawals since June last year.
The price of Bitcoin, the world's main digital currency, has fallen considerably, dropping to its lowest point since mid-November after reaching record highs earlier this year. Other cryptocurrencies declined as well, with an index that tracks major digital tokens heading toward its biggest four-day decrease since early August.
Despite investors leaving Bitcoin funds, many took advantage of recent stock market declines by adding nearly $7 billion combined to the Invesco QQQ Trust and SPDR S&P 500 ETF Trust on the same day.
Geoff Kendrick, global head of digital assets research at Standard Chartered, explained: "Digital assets remain heavily influenced by retail investor activity, despite institutional investment over the past 12 months. This makes them different from stocks and bonds. I believe this means the average investor has less financial capacity to withstand losses, which suggests more downward pressure ahead."
Kendrick expects Bitcoin to fall further—possibly to around $80,000—at which point he plans to purchase it during the price dip.
Matthew Sigel, VanEck's head of digital-asset research, suggested these record outflows likely result from hedge funds abandoning a popular trading approach called the basis trade. This strategy takes advantage of price differences between immediate purchases and future contracts markets. Some investors have used these ETFs to benefit from cryptocurrency price swings or balance short positions in derivatives.
"This strategy involves buying Bitcoin spot (often through ETFs) and shorting Bitcoin futures simultaneously to secure a low-risk return," Sigel explained.
