BlackRock's iShares Bitcoin Trust suffered its largest single-day outflow since launching in January 2024, with investors withdrawing $523.2 million on Tuesday in a sharp escalation of the institutional retreat that has defined November's crypto market collapse.
The record redemption pushed the world's largest spot Bitcoin ETF into its fifth consecutive day of net outflows, totaling $1.43 billion over that stretch. November's cumulative outflows from IBIT alone have now reached approximately $2.1 billion, accounting for the bulk of the nearly $3 billion that has exited all U.S. spot Bitcoin ETFs this month.
The exodus has left the average spot Bitcoin ETF buyer sitting on a razor-thin margin. According to Jim Bianco of Bianco Research, the average purchase price across all spot Bitcoin ETF inflows since January 2024 stands at $90,146. With Bitcoin trading near $91,000, most institutional investors who entered through these products are barely in the green for the first time since early in the rally.
Tuesday's outflows from IBIT broke the fund's previous record of $463 million set just five days earlier on November 14. The pattern reflects a sustained institutional deleveraging that has accelerated throughout the month despite Bitcoin showing signs of stabilization above $90,000. Franklin Templeton's EZBC and Grayscale's Bitcoin Mini Trust provided some counterbalance, recording inflows of $10.8 million and $139.6 million respectively. However, those gains were insufficient to offset the broader selling pressure. Total net outflows across all U.S. spot Bitcoin ETFs reached $372.7 million on Tuesday, marking the fifth straight trading session of redemptions.
November has produced only three days of net inflows across the entire spot Bitcoin ETF complex. If current trends persist through the end of the month, total outflows could surpass the $3.56 billion recorded in February, which would make November the worst month for ETF flows since launch despite the asset class's historical tendency to perform well during this period.
Since their debut in January 2024, U.S. spot Bitcoin ETFs have attracted roughly $58 billion in cumulative net inflows. The products transformed institutional access to cryptocurrency and were widely credited as a primary driver of Bitcoin's momentum throughout 2025.
Most ETF Buyers Now Underwater or Flat
The timing of the outflows has created an uncomfortable reality for many institutional investors. Bitcoin has dropped nearly 30% from its early October record above $126,000, falling below $90,000 earlier this week for the first time in seven months before recovering slightly.
That decline has pushed most 2025 institutional buyers into the red for the first time. Research cited by analysts suggests the average cost basis for ETF investors sits near $89,600 to $90,146, meaning a substantial portion of holders are now either underwater or barely profitable.
Bianco highlighted the precarious positioning in recent commentary, noting that the $59 billion that has flowed into the first ten spot Bitcoin ETFs now carries unrealized profits of only around $2.94 billion, or 4.7%. He argued that had the same capital remained in a money market fund over the past 22 months, it would have generated larger unrealized gains.
The thin cushion raises concerns about potential cascading redemptions if Bitcoin fails to hold current levels. Analysts warn that if ETF participants shift to sustained net selling, market liquidity could deteriorate rapidly.
Institutional Recalibration, Not Capitulation
Despite the scale of the outflows, some market observers argue the redemptions reflect portfolio rebalancing rather than a fundamental loss of faith in Bitcoin.
Vincent Liu, chief investment officer at Kronos Research, characterized the record withdrawals as a signal of institutional recalibration. Big allocators are trimming risk and testing entry points until macroeconomic signals clarify, he said. When conditions improve, "risk-on appetite and allocation will quickly return."
The outflows coincide with broader uncertainty across financial markets. The extended U.S. government shutdown has reduced liquidity, while fading expectations for a December Federal Reserve rate cut have pressured risk assets broadly. The CME FedWatch Tool currently assigns less than a 50% probability to a 25 basis point cut next month.
Bitcoin and the broader crypto market have been closely tracking macroeconomic sentiment, behaving more like risk-correlated equities than the uncorrelated stores of value their proponents once envisioned.
Options Market Signals Defensive Positioning
The institutional anxiety is visible beyond ETF flows. Options traders have moved aggressively to hedge against further downside, with the cost of protective puts reaching multi-month highs relative to calls.
Sean Dawson, head of research at Derive.xyz, noted a growing number of market participants are buying protection against Bitcoin falling to $80,000 by late December. The 250-day put-call skew for IBIT options has surged to 3.1%, its highest level in seven months, according to MarketChameleon data.
The bearish positioning suggests that even as some funds reduce exposure through redemptions, others are preparing for the possibility of extended weakness.
IBIT Remains Dominant Despite Headwinds
The recent outflows have not materially dented IBIT's dominant position in the ETF landscape. The fund still holds approximately $72.76 billion in net assets, making it the largest spot Bitcoin ETF globally by a wide margin.
IBIT's share price has fallen roughly 16% to around $52, its lowest level since April. However, the fund attracted approximately $26 billion in inflows this year prior to the November reversal, and its assets under management dwarf those of competitors.
The fund's scale makes its flows particularly influential for market sentiment. Large single-day redemptions can ripple across the spot market as ETF managers sell underlying Bitcoin to meet withdrawal demands.
Dilin Wu, research strategist at Pepperstone, told Bloomberg that ETF outflows combined with long-term holder sales have tightened market liquidity, pushing short-term Bitcoin prices lower and highlighting weakening market confidence.
Broader Market Remains Fragile
The ETF exodus reflects a broader fragility in crypto markets. Digital asset investment products recorded $2 billion in outflows last week alone, the third consecutive week of withdrawals, bringing the three-week total to $3.2 billion.
Spot Ethereum ETFs have followed a similar pattern. BlackRock's ETHA recorded $165 million in outflows on Tuesday, while the broader Ethereum ETF complex has seen over $900 million in redemptions during the recent losing streak.
Some altcoin products have shown resilience. Spot Solana ETFs have extended their positive flow streak to 16 days, accumulating $420 million in inflows even as Bitcoin and Ethereum products bleed.
Analysts suggest the pattern reflects a maturing yet risk-averse market where investors are differentiating between assets rather than treating all crypto as a single trade. However, without a clear catalyst to reverse sentiment, the near-term outlook remains uncertain.
Bitcoin traded near $91,400 on Wednesday morning, up slightly from its weekly lows but still down roughly 30% from its October peak. All eyes remain on the Federal Reserve's December meeting and incoming economic data for signals that could shift institutional positioning in either direction.