Bitcoin ETF sees record outflows – What triggered the plunge?

  • Bitcoin ETFs faced record outflows of $242.6 million amid rising geopolitical tensions.
  • Ethereum ETFs also declined, with cumulative outflows totaling $48.6 million as of the 1st of October.

As a seasoned crypto investor with a decade of experience under my belt, I’ve weathered numerous market storms and witnessed the ebb and flow of digital assets like Bitcoin and Ethereum. The recent outflows from Bitcoin and Ethereum ETFs are not unfamiliar territory for me, but the sheer magnitude is certainly eye-catching.


Following a stretch of strong investments, Bitcoin ETFs saw a significant decrease in inflows, reaching a record high for outflows instead.

Bitcoin ETF analyzed

On the 27th of September, inflows peaked at an impressive $494.4 million, but by October 1st, a combined withdrawal from eleven U.S. spot Bitcoin ETFs amounted to $242.6 million – the highest in almost a month since the $288 million outflow on September 3rd.

Among the most affected was Fidelity’s FBTC, which alone accounted for $144.7 million in outflows.

Additionally, notable withdrawals occurred from ARK 21Shares’ ARKB fund, amounting to about $84.3 million, and Bitwise’s BITB, where approximately $32.7 million was withdrawn.

Over the past 15 days, BlackRock’s IBIT has received a total of $40.8 million, indicating no outflows and suggesting a divided opinion in the Bitcoin ETF market.

What’s causing this decline?

The drop in Bitcoin and cryptocurrency values can mainly be attributed to the rising conflict between Israel and Iran.

The missile attacks launched by Iran as a response to Israel’s actions towards Hezbollah have increased market anxiety, causing substantial drops in stock values.

The current dispute isn’t something fresh – back in the early part of this year, Iran responded to previous incidents with drone and missile strikes. This action led to a significant drop in Bitcoin’s value by approximately 8%.

Given indications suggesting a possible deterioration, it’s likely that the cryptocurrency market could face more adverse effects.

Remarking on which precious metals’ analyst Jesse Colombo said, 

Bitcoin ETF sees record outflows – What triggered the plunge?

Ethereum ETFs follow Bitcoin’s suit

As expected, Ethereum [ETH] ETFs experienced a notable decline similar to that of Bitcoin ETFs.

Although the Ethereum ETF hadn’t been on a prolonged inflow streak like its Bitcoin counterpart, it had recently recorded some significant inflows.

As of the 1st of October, however, cumulative outflows for Ethereum ETFs totaled $48.6 million.

In a recent comparison, Grayscale’s ETHE emerged as the leader with an outflow of approximately $26.6 million, while Fidelity’s FETh and Bitwise’s ETHW trailed closely behind, recording outflows of around $25 million and $9 million respectively.

Contrary to the majority of Ethereum ETFs that saw no investment activity, the 21Shares’ CETH and VanEck’s ETHV stood out, recording inflows of approximately $1.2 million for CETH and $2.7 million for ETHV.

Impact of geopolitical tensions

It’s clear that the rising conflicts in the Middle East didn’t just affect Exchange-Traded Funds (ETFs), but also had a broader impact on the entire cryptocurrency market.

For example, The total value of all cryptocurrencies dropped to approximately $2.17 trillion, representing a decrease of 4.10%, as reported by CoinMarketCap.

In the last day, Bitcoin’s worth decreased by approximately 3%, while Ethereum experienced a steeper dip of over 6%.

Instead, while conventional commodities such as gold and crude oil have seen substantial increases in value, the price of gold climbed approximately 1.4% to reach $2,665 per ounce, almost touching its maximum historic value, according to Goldprice.org.

Crude oil prices surged nearly 7%, hitting $72 per barrel.

Moreover, it’s worth noting that both bonds and the U.S. dollar gained strength after Iran’s missile attacks against Israel on October 1st, highlighting the increased market turbulence due to geopolitical instability.

In agreement with Colombo’s viewpoint, Li Xing, a strategic consultant for financial markets at Exness, articulated this particularly well by stating:

The intensifying conflicts in the Middle East have led investors to find safety in gold, making it more desirable as they navigate the broader financial markets’ unpredictability.

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2024-10-02 20:08