TLDR
- Bitcoin ETFs posted a record $40.32B in trading volume last week.
- BlackRock’s IBIT accounted for $27.79B or 70% of total ETF trades.
- ETF redemptions reached $3.55B in November amid a 23% BTC drop.
- Bitcoin’s average ETF entry price sits above $90K; current price is $86.7K.
The 11 U.S.-listed spot bitcoin exchange-traded funds (ETFs) recorded a combined trading volume of $40.32 billion last week. This marked the highest weekly total since these products launched and reflects a sharp rise in investor activity during a period of market stress.
According to data from SoSoValue, BlackRock’s iShares Bitcoin Trust (IBIT) accounted for nearly $27.79 billion, or almost 70% of the total weekly volume. This large share points to IBIT’s dominance in the market and its central role in institutional trading behavior over the past week.
Sharp Drop in Bitcoin Price Accompanies ETF Surge
Bitcoin’s price fell by 23% this month, reaching $86,700, according to CoinDesk data. On some exchanges, it briefly dropped below $80,000. The price decline coincided with the spike in ETF trading activity, suggesting that many investors may have been reducing exposure to the asset.
This decline has placed most ETF holders underwater, as Bianco Research reported that the weighted-average entry price for spot bitcoin ETF investors is above $90,000. With current prices well below this level, many institutions are sitting on unrealized losses.
Redemptions Indicate Institutional Exit
The same period saw spot bitcoin ETFs process record monthly redemptions totaling $3.55 billion. This trend challenges the idea that large holders of these products are committed to long-term positions. Instead, the data may reflect a shift in sentiment among institutions, who appear to be selling to limit losses or rebalance portfolios.
On Friday alone, the ETFs processed $11.01 billion in trading volume. IBIT was responsible for $8 billion of that daily total, further confirming its outsized role in the broader ETF activity. The wave of redemptions supports the view that institutional investors are reducing exposure during the recent price decline.
Market Uncertainty Fuels Activity
The surge in trading and redemptions comes amid rising concerns over global macroeconomic conditions. Fears related to inflation, interest rates, and geopolitical tension may be driving more cautious positioning among institutions.
The level of ETF trading suggests a reassessment of risk. While some market participants may be rotating capital elsewhere, others may be taking profits or cutting losses in anticipation of further volatility.
Bitcoin ETFs had previously been seen as a signal of growing institutional adoption. However, the latest activity shows that these products can also experience swift outflows when sentiment changes. It also indicates that while spot ETFs offer regulated exposure to bitcoin, they do not insulate holders from price fluctuations or market-driven sell-offs.
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