U.S. Bitcoin spot exchange-traded funds recorded net outflows of $903 million on November 20, marking the second-largest single-day exodus since the products' January 2024 inception, as institutional investors pivoted to risk-off positioning ahead of year-end amid mounting macroeconomic uncertainty.

BlackRock's iShares Bitcoin Trust (IBIT), the world's largest Bitcoin ETF, bled $355.5 million on Thursday alone, followed by Grayscale's GBTC with $199.35 million in outflows. Fidelity's FBTC saw $190.4 million leave the fund, alongside withdrawals from Bitwise, Ark & 21Shares, VanEck, and Franklin Templeton. The massive outflows coincided with Bitcoin plunging from above $92,000 to below $88,000, before extending losses to $85,400 as U.S. markets opened.

Ethereum spot ETFs fared no better, recording $262 million in net outflows—marking the eighth consecutive day of redemptions, according to data from SoSoValue. BlackRock's ETHA accounted for a significant portion of Thursday's Ethereum withdrawals as institutional appetite for the second-largest cryptocurrency waned in tandem with Bitcoin.

The dual exodus from Bitcoin and Ethereum ETFs underscores a broader flight from crypto assets as investors reassess risk exposure amid deteriorating market conditions. Data shows U.S. spot Bitcoin ETFs have bled nearly $3 billion in net outflows throughout November alone, positioning the month as potentially the worst for ETF flows since the products launched.

Institutional Profit-Taking Dominates

The outflows represent a dramatic sentiment shift from the steady inflows that characterized much of 2024, when Bitcoin ETFs emerged as the primary driver of the cryptocurrency's ascent to new all-time highs above $126,000 in October. Market analysts attribute the reversal to multiple converging factors: profit-taking by institutional holders, deteriorating technical indicators, and broader macroeconomic headwinds.

"A big sentiment shift from steady inflows earlier this month," said Rachael Lucas, crypto analyst at BTC Markets, commenting on the data. "And it's not just crypto bleeding. Nvidia's accounts receivable spike spooked equity markets, triggering a broader risk-off move. When tech giants wobble, liquidity tightens everywhere, and Bitcoin feels the pinch."

Przemysław Kral, CEO of European crypto exchange zondacrypto, noted that significant outflows indicate institutional players are securing profits ahead of year-end. "Institutional investors are leading the charge, with ETF outflows signaling profit-taking and risk-off positioning," Kral stated. "Volatility is high, and the macro environment can change quickly."

The November 20 outflow figure represents the highest single-day redemption since February 25, 2025, when President Donald Trump's surprise announcement of new trade tariffs triggered a massive sell-off across equity and crypto markets. That earlier episode saw similarly dramatic outflows as investors fled risk assets en masse.

Technical and Fundamental Pressures Mount

Thursday's price action saw Bitcoin briefly climb above $92,000 intraday before quickly reversing course after U.S. equity markets opened. The cryptocurrency extended its slide to $85,400 before finding some stability, representing a decline of more than 7% from the day's highs. The selloff occurred despite IBIT's ETF price rising slightly at the beginning of trading on November 19, highlighting the disconnect between derivatives flows and spot price action.

The exodus from Bitcoin ETFs comes as November's total outflows approach $3 billion, threatening to surpass the $3.56 billion seen in February and establish November as the worst month on record for ETF flows. This is particularly striking given November's historical tendency to be one of Bitcoin's strongest months seasonally, with the cryptocurrency averaging a 41.22% rally during the month based on historical data.

BlackRock's IBIT alone has experienced a sustained outflow trend, with five consecutive days of net redemptions totaling $1.43 billion as of mid-November. On a weekly basis, the fund posted four straight weeks of outflows totaling $2.19 billion, significantly eroding the dominant ETF's assets under management.

The broader cryptocurrency market has followed Bitcoin lower, with the CoinDesk 20 Index declining sharply alongside heightened volatility across major tokens. Stocks of crypto-related companies mirrored the weakness, with MicroStrategy and Coinbase shares falling as mining firms like MARA Holdings and Riot Platforms posted declines exceeding 7%.

Altcoin ETFs Show Mixed Signals

While Bitcoin and Ethereum ETFs hemorrhaged capital, newly launched altcoin products provided a contrasting narrative. Solana ETFs saw $23.66 million in net inflows on Thursday, while XRP ETFs attracted $118.15 million, suggesting potential capital rotation among institutional investors seeking exposure to alternative cryptocurrencies with clearer regulatory pathways.

The divergence hints at evolving institutional strategies, with some allocators diversifying away from Bitcoin and Ethereum dominance toward emerging layer-1 protocols and assets benefiting from recent regulatory clarity.

Bitwise's BSOL, the first spot Solana ETF in the U.S., has posted 16 straight days of net inflows, accumulating $420.4 million in total net inflows since launching on October 28.

Long-Term Holders Accumulate Despite Selloff

Despite the institutional exodus through ETF vehicles, on-chain data suggests a more nuanced picture of market dynamics. Kral observed that large Bitcoin holders continue to purchase the cryptocurrency at current depressed prices. "This is a sign of underlying strength and confidence in the project, even though the price is falling," he noted.

This apparent divergence between ETF flows and whale accumulation behavior suggests differing time horizons and investment strategies among market participants. While ETF investors - primarily institutions focused on near-term performance and year-end positioning - have been selling, long-term holders appear to view current prices as an accumulation opportunity.

"For some, this could be a chance to enter the market at a lower price than we've seen recently," Kral added. "Therefore, it is important to recognize the risks. Volatility is high, and the macro environment can change quickly."

Crypto exchange Luno echoed this assessment in its market insights, stating that ETF outflows indicate "risk-off positioning" with large investors securing profits ahead of year-end. The firm noted that while long-term investors may have opportunities to accumulate tokens at lower prices, short-term traders face significant challenges in timing a market recovery amid elevated volatility and uncertain macro conditions.

Final thoughts

The cryptocurrency selloff didn't occur in isolation. Global equity markets experienced weakness throughout the week, with technology stocks particularly hard-hit following disappointing guidance from several major firms. Nvidia's quarterly report, while showing strong year-over-year revenue growth, raised concerns about accounts receivable that spooked investors and triggered broader selling across risk assets.

The S&P 500, Nasdaq Composite, and Dow Jones Industrial Average all posted losses exceeding 1% as uncertainty around the Federal Reserve's interest rate policy trajectory into 2025 weighed on sentiment. The U.S. central bank has signaled it will take a more cautious approach to rate cuts than markets had anticipated, keeping borrowing costs higher for longer - a headwind for speculative assets like cryptocurrencies that tend to underperform in restrictive monetary policy environments.

Looking ahead, market participants will be watching for signs of stabilization or further deterioration. The combination of sustained ETF outflows, technical breakdown below key support levels, and unfavorable macroeconomic conditions suggests the path of least resistance may remain lower in the near term, even as some long-term holders view current prices as attractive entry points for accumulation.