Fidelity and Ark Lead $541M Outflow in US Bitcoin ETF Market

• U.S. Bitcoin ETFs faced $541M outflows on Nov 4, with Fidelity’s FBTC losing $170M.
• BlackRock’s IBIT saw $38M inflows as other U.S. Bitcoin ETFs faced major outflows.
• NYSE Arca filed a request with the SEC to list Grayscale Digital Large Cap Fund.

On November 4, U.S. spot Bitcoin exchange-traded funds (ETFs) experienced their second-largest single-day outflow since their inception. Data from Farside Investors revealed that $541 million was withdrawn, underscoring substantial investor activity. This outflow followed a record high of $563 million set earlier on May 1. Investors have shown varying confidence in different ETFs, with several funds seeing their highest levels of withdrawals.

Outflows Impact Prominent Funds

Among the hardest hit was Fidelity’s FBTC, which recorded withdrawals amounting to $170 million. This marked the fund’s second-largest daily outflow to date. Additionally, Ark Invest’s ARKB and Bitwise’s BITB suffered significant losses. ARKB experienced outflows of $138 million, while BITB saw withdrawals totaling $80 million. These withdrawals marked their highest single-day outflows since their respective launches.

Grayscale’s BTC fund experienced significant investor withdrawals, totaling $89 million. Additionally, the GBTC fund, a well-established product in the crypto market, saw a $64 million decrease in investments. The withdrawals underscored a broader trend of profit-taking and market adjustments among major funds.

BlackRock Reports Inflows 

In contrast to the significant outflows experienced by other funds, BlackRock’s IBIT fund stood out with net inflows of around $38 million on the same day. This marked a rare instance where an ETF managed to attract investments amid a wave of withdrawals affecting its peers. Other funds like WisdomTree’s BTCW and Invesco’s BTCO reported no net changes in their positions.

Franklin Templeton, VanEck, and Valkyrie also saw notable movements. Collectively, these funds reported outflows exceeding $38 million, contributing to the broader pattern of market shifts and portfolio rebalancing.

Upcoming Developments 

Elsewhere, a proposal to list the first ETF that would hold a basket of diverse cryptocurrencies is under review by U.S. regulators. On October 29, NYSE Arca filed a request with the US Securities and Exchange Commission to list the Grayscale Digital Large Cap Fund (GDLC). 

If approved, Grayscale’s Bitcoin, Ether, Solana, Avalanche, and XRP holdings would make it one of the largest ETFs in the market. Total assets under management as of November 4 were $534 million. The proposed rules, said Grayscale, could set a precedent to allow for the trading of multi crypto asset ETFs.

Ultimately, the recent wave of significant outflows highlights the volatile nature of the cryptocurrency market and investors’ ongoing reassessment of their portfolios. While many funds experienced substantial withdrawals, BlackRock’s ability to attract inflows demonstrates selective investor confidence in certain products. As regulatory bodies consider proposals like Grayscale’s multi-crypto asset ETF, the market anticipates potential shifts. These could redefine investment strategies and broaden the range of available cryptocurrency-linked funds.

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