Bitcoin ETF triggers a $2.5 billion exodus! BlackRock's IBIT suffers a $1.6 billion loss.

As of November 17, the net outflow of spot Bitcoin ETFs traded in the United States was $2.57 billion, marking the most severe monthly pullback since their launch in January 2024. BlackRock's IBIT fund was hit hard on November 14, with a single-day drop of up to $463.1 million, setting a historical record. IBIT alone accounted for nearly $1.6 billion of the total redemption amount for the month.

BlackRock IBIT sets record for single-day outflow of 460 million dollars

(Source: Farside Investors)

BlackRock's flagship fund IBIT recorded its worst single-day fall since its inception, causing most Bitcoin ETF buyers to suffer losses for the first time. On November 14, IBIT saw outflows of $463.1 million in a single day, a figure that not only marks a historical high for IBIT but also signifies the first major setback for the world's largest asset management company in the Bitcoin ETF space.

Since its launch in January 2024, IBIT has been the leader in the Bitcoin ETF market. With BlackRock's brand influence and distribution network, IBIT attracted a large amount of institutional and retail capital in its early days, with its assets under management once exceeding 40 billion dollars, making it one of the fastest-growing ETFs in history. However, the fund outflow in November completely changed this narrative.

IBIT alone accounted for nearly 1.6 billion USD of the total redemption amount for the month, indicating that more than 62% of the total outflow of 2.57 billion USD came from a single fund by BlackRock. This concentration shows that institutional investors are withdrawing from Bitcoin ETF exposure on a large scale, rather than just retail panic selling. Institutional investors typically have a longer investment horizon and stricter risk management frameworks, and their withdrawals often signal deeper structural issues in the market.

On November 13, the wave of capital outflows reached its peak. According to data from Farside Investors, $866.7 million flowed out of funds that day, marking the second-largest single-day fall in history. This figure is only surpassed by a certain day of extreme volatility, indicating that market panic has spread to the Bitcoin ETF sector. Two consecutive days of massive outflows have formed a dangerous pattern, suggesting that this is not a short-term technical adjustment, but rather a strategic withdrawal by investors.

How ETF Mechanisms Amplify Spot Market Pressure

Bitcoin ETF fund flows are directly converted into spot demand through the subscription and redemption process of authorized participants (APs). When funds flow into the ETF, authorized participants must purchase or acquire underlying Bitcoin and deliver it to the fund custodian, generating actual spot transactions. Demand that exceeds natural selling pressure will tighten the circulating supply and push up the clearing price.

Conversely: redemptions force funds to sell Bitcoin or unwind hedges, thereby suppressing the spot market price decline. This mechanism operates by bypassing retail cryptocurrency exchange channels. Retirement accounts, registered investment advisors, and large brokerage platforms introduce institutional capital that would not otherwise flow into the on-chain market. When these allocators change their strategies, they eliminate the structural demand that absorbed the issuance of mining stocks and other cyclical supplies.

Bitcoin ETF Transmission Mechanism to Spot Market

Subscription Phase: Investors buy ETF shares → AP purchases BTC in the Spot market → The fund custodian holds BTC → Reduces circulating supply

Redemption Phase: Investors sell ETF shares → AP retrieves BTC from the fund → Sells BTC on the spot market → Increases selling pressure

Time Delay: AP will execute operations during U.S. market trading hours, and trading volume data is released after the market closes, causing intraday price fluctuations.

After the halving, the daily mining output is about 450 BTC. A sustained net buying volume above this level would result in negative net new supply, which typically supports price increases. However, when the Bitcoin ETF experiences a net outflow of 2.57 billion dollars, it implies that daily sales in the spot market need to exceed 450 BTC by a large margin. This selling pressure far exceeds the daily output of miners, directly leading to a price fall.

In addition, timing is also crucial. Some participants use futures on the Chicago Mercantile Exchange (CME) for hedging before purchasing Spot, leading to a split in the intraday price discovery mechanism between the derivatives market and the Spot market. Price fluctuations may occur hours before the main trading volume data. This mechanism operates similarly during capital outflows, where early sell-offs in the futures market often exacerbate panic in the Spot market.

Bitcoin price falls to $89,253 in a chain reaction

Bitcoin fell 14.7% in the same month, briefly touching $89,253.78 on November 17, the lowest level since April, before rebounding to $93,426.16, a 1.3% increase within 24 hours. Bitcoin's monthly decline reached 18.6% (calculated from the peak) to $89,253.78, reflecting the scale of capital outflow from Bitcoin ETF.

These funds were once a stable source of fiat currency native demand, absorbing spot supply and reducing the available circulation. The reversal in November broke this support structure, while miners were still producing 450 Bitcoins daily, and the market was digesting the previous inflows of funds, which had pushed Bitcoin above $111,000 earlier in the month.

From $111,000 to $89,253, Bitcoin has fallen nearly 20% in just a few weeks, a decline that is extremely rare during the mid-stage of a bull market. Even more concerning is that this drop was not triggered by macro events or regulatory crackdowns, but rather a pure demand-side collapse. Bitcoin ETFs were once seen as the “highway” for institutional funds to enter the crypto market, but November's data shows that this highway may also become a quick route for capital withdrawal.

Capital flow does not occur in isolation. Even if there is capital outflow, Bitcoin may still rise if overseas leverage expands or other groups of buyers emerge. Conversely, if macro risks, a stronger dollar, or liquidations dominate, capital inflow does not guarantee profits. However, over the course of several weeks, persistent redemptions indicate that enduring demand is weakening, reducing the minimum price needed to attract sellers.

Warning Signal of Structural Demand Withdrawal

The recent withdrawal of $2.57 billion is the first sustained test of whether Bitcoin ETF demand can stabilize during periods of volatility, or whether these instruments will exacerbate pullbacks when investors rotate out. The redemption amount for IBIT alone reached $1.6 billion, surpassing the total monthly outflow recorded in any previous period, with the outflow concentrated in the largest and most liquid funds.

Despite the price of Bitcoin rebounding to above $93,000, indicating some buying interest at lower price levels, the cumulative losses this month reflect a retreat in the structural demand supporting the asset's rise in early 2024 and 2025. This retreat may stem from multiple factors: the rebalancing needs of institutional investors, concerns about the macroeconomic outlook, or a correction of the overvaluation of Bitcoin ETFs.

For the Bitcoin ETF market, the capital outflow tide in November is a watershed moment. It proves that while the ETF structure lowers the investment threshold, it also creates new systemic risks. When institutional investors collectively withdraw, the ETF mechanism directly transmits this selling pressure to the spot market, amplifying price volatility. In the coming months, the market will closely monitor the capital flows of Bitcoin ETFs, which will become a key leading indicator for judging the price trend of Bitcoin.