Crypto ETFs Experience $530M Exodus Following Post-Election Rally Reversal
Exchange-traded funds tracking Bitcoin and Ethereum witnessed combined withdrawals of $530 million on Thursday amid Bitcoin's drop beneath $76,000 and broader equity market declines.
Exchange-traded funds focused on spot Bitcoin and Ether in the United States witnessed approximately $530 million in net withdrawals on Thursday during a period of sharp declines across cryptocurrency markets.
Exchange-traded funds tracking Bitcoin (BTC) saw $430 million in net withdrawals, while funds focused on Ether (ETH) experienced approximately $100 million in outflows, based on data provided by SoSoValue.
This turnaround came after $128 million in aggregate inflows recorded on Wednesday, a day when Bitcoin momentarily surged past the $80,000 threshold following Democratic Party successes in US midterm elections.
Bitcoin retreated to below the $76,000 level while the technology-focused Nasdaq Composite experienced a sharp 5.5% downturn on Thursday, marking its most significant one-day drop since April 2025, based on Reuters reporting.
Fidelity's Bitcoin fund sees largest withdrawals
Thursday's largest exodus came from Fidelity's Wise Origin Bitcoin Fund (FBTC), which experienced approximately $200 million in withdrawals following an influx of around $237 million the previous Wednesday, based on data from Farside Investors.
BlackRock's iShares Bitcoin Trust (IBIT) saw an additional $105 million in net withdrawals. These recent outflows mark IBIT's fifth consecutive trading session of withdrawals, totaling over $1 billion in redemptions since Oct. 30.
Following the conclusion of Thursday's trading session, Bitcoin ETFs' cumulative net outflows for the year reached approximately $510 million.
Market experts assess conditions following sell-off
Cryptocurrency market analyst Michaël van de Poppe stated on X during Thursday's session that Bitcoin might establish a short-term floor on Friday, possibly following a decline below the $75,000 level, citing the magnitude of the Nasdaq's downturn.
I expect Nasdaq to bottom tomorrow. The same for Bitcoin, potentially after sweeping $75,000.
Dean Lyulkin, who serves as CEO of Cardiff and established the investment publication The Dean's List, emphasized that today's market conditions are distinct from those that preceded the 2008 financial crisis.
The global financial crisis wasn't caused by Democrats taking Congress.
Lyulkin highlighted that the Federal Reserve had already implemented significant interest rate increases and the housing sector was showing signs of weakness prior to that crisis.
Despite recognizing potential weaknesses in commercial real estate markets, private credit sectors and possibly inflated spending on artificial intelligence technologies, Lyulkin maintained that consumer balance sheets and the financial banking infrastructure are substantially more robust in the current environment.