Bitcoin and Ethereum ETFs suffered massive withdrawals on Wednesday, October 29, totaling more than $550 million in a single day. Fidelity, BlackRock and ARK Invest are among the victims of this wave of buybacks which reflects a sudden change in sentiment. But is this a simple correction or the prelude to a deeper movement?
In brief
- Spot Bitcoin ETFs saw $470 million in net outflows on October 29.
- Fidelity's FBTC fund comes in first with $164 million in withdrawals.
- Ethereum ETFs lost $81.4 million, mostly through Fidelity's FETH.
Investors are massively turning away from Bitcoin and Ether ETFs
Crypto-related exchange-traded funds have suffered a major setback. Indeed, on October 29, Bitcoin and Ether ETFs suffered massive withdrawals, illustrating renewed caution among institutional investors.
Fidelity led the way with $164 million from its FBTC fund, followed by ARK 21Shares ($143 million) and BlackRock ($88 million). In the Ether segment, Fidelity’s FETH lost 69.5 million in just a few hours.
This coordinated movement reflects growing nervousness in an unstable macroeconomic context. The Fed's rate cut, although anticipated and generally favorable to risky assets, did not have the expected effect. Bitcoin even lost 2.4% after the statements of Jerome Powell, who recognized internal divisions on the possibility of a further decline in December.
Ryan Lee, chief analyst at Bitget, analyzes this market backlash:
We view the strong wave of cryptocurrency sales that followed Fed Chairman Jerome Powell's moderate tone as a classic case of disappointed expectations in a market hypersensitive to liquidity signals.
Large investors preferred to lock in their gains and rebalance their portfolios. Between the increased volatility of bitcoin, the rise in bond yields and geopolitical tensions, the climate has become conducive to caution.
The divergence of views within the Fed portends monetary policy decisions that are more difficult to anticipate. This growing uncertainty translates into a drop in investor confidence and directly weighs on the appetite for crypto ETFs.
The scale of the movement is impressive. October, however, started on an optimistic note, marked by regular inflows of capital. But the end of the month suddenly reversed the trend.
Analysts point the finger not only at macroeconomic factors, but also at typically institutional behavior: unlike individuals who remain relatively stable, large portfolios quickly adjust their positions in the face of contradictory signals.
Between immediate turbulence and long-term conviction
The divergence between Bitcoin and Ether perfectly illustrates the challenges of the sector. The first is gradually establishing itself as a strategic reserve asset recognized by institutions, while the second remains hampered by persistent regulatory uncertainty.
The $81.4 million withdrawn from Ether ETFs reflects still timid institutional adoption, in contrast to the strength of the Bitcoin market.
However, long-term fundamentals remain strong. Matt Mena, analyst at 21Shares, recalls that November is historically favorable for bitcoin, with positive performance in eight of the last twelve years and an average of +46%.
Despite recent volatility, the $50 billion in assets under management of Bitcoin ETFs demonstrates a deep conviction among professional investors.
The big banks, for their part, anticipate at least two new rate cuts in 2025, a scenario which could breathe new life into digital assets and revive flows towards crypto products.
Are we witnessing a simple tactical withdrawal or the start of a deeper correction? If 56% of market participants still expect a rate cut in December, internal divisions at the Fed and Sino-American trade tensions maintain a climate of uncertainty. For crypto ETFs, November will serve as a litmus test: that of resilience in the face of macroeconomic nervousness.
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