Key Takeaways
- • U.S. spot Bitcoin ETFs took in $524.8 million on October 21, then lost $635.6 million on October 22 and another $137.9 million on October 23, according to Farside Investors' daily fund-flow data.
- • The October 19 to 23 net total remained positive at $301.2 million, but the two withdrawal sessions removed $773.5 million, about 72% of the prior three sessions' $1,074.7 million in gains.
- • BlackRock's IBIT ($254.1 million) and Fidelity's FBTC ($217.5 million) accounted for roughly 74% of the October 22 net outflow.
- • Daily ETF flow totals cannot identify who bought the other side of the redemptions or whether the withdrawals forced Bitcoin sales on spot exchanges, because ETF share trades and in-kind redemptions can settle without immediate coin sales.
- • The SEC's July 2025 approval of in-kind redemptions means a fund outflow does not automatically trigger a same-day Bitcoin sale by the trust.
Summary
U.S. spot Bitcoin exchange-traded funds reversed direction sharply in late October. According to Farside Investors, the products took in $526.7 million on October 19, $23.2 million on October 20 and $524.8 million on October 21, before recording $635.6 million in outflows on October 22 and $137.9 million on October 23. The five-session net inflow of $301.2 million remained positive, but the two withdrawal days erased roughly 72% of the prior three sessions' gains. Bitcoin traded around $80,000 to $82,000 during the withdrawals, failing to hold a move toward $85,000.
The October 22 outflow was concentrated in a few issuers. BlackRock's IBIT lost $254.1 million and Fidelity's FBTC lost $217.5 million, together about 74% of the day's net withdrawal. ARK Invest and 21Shares' ARKB lost $109.4 million, Grayscale's GBTC lost $29.5 million and Bitwise's BITB lost $27.4 million, while Morgan Stanley's MSBT recorded a $2.3 million inflow. On October 23, IBIT lost a further $110.3 million and FBTC lost $31.8 million. Source figures differ modestly across providers: SoSoValue put the October 22 outflow at $635.49 million, and Lookonchain and Glassnode reported different daily tallies, including a $653 million October 19 inflow against Farside's $526.7 million.
The article stresses that a net ETF flow figure does not show who sold, who bought, or how Bitcoin changed hands. An ETF share can be sold to another investor on the exchange without any change in the trust's bitcoin holdings. Market makers and authorized participants may hold shares, hedge exposure or redeem baskets later, and the redemption route determines whether pressure reaches spot markets. BlackRock's IBIT prospectus permits cash, partial cash or in-kind redemptions at the sponsor's discretion, and the SEC approved in-kind processing for spot crypto products in July 2025, ending the cash-only requirement from the January 2024 launch. Commissioner Mark Uyeda had noted that cash-only structures could force issuers to sell bitcoin to raise redemption cash.
The analysis also cautions against treating outflows as proof of forced selling, while acknowledging that selling pressure can still arise. Glassnode's October 21 research placed the cost basis of U.S. spot ETF and corporate treasury holdings near $80,000 to $81,500, with potential liquidation clusters between $85,000 and $87,500, but that research did not identify the buyers of the October 22 and 23 redemptions. Redemptions that are paid in kind may be sold later by recipients, while cash redemptions may lead the fund or its agent to sell bitcoin directly, and market-maker hedging through futures or spot can also press prices. Timing differences, including the 2 p.m. Eastern in-kind cutoff in BlackRock's prospectus, mean that same-session matching of outflows to sales would be unreliable. The data therefore show that ETF investors withdrew capital during a period of falling bitcoin prices, but not the specific counterparties or trading routes behind those withdrawals.
The October 22 outflow was concentrated in a few issuers. BlackRock's IBIT lost $254.1 million and Fidelity's FBTC lost $217.5 million, together about 74% of the day's net withdrawal. ARK Invest and 21Shares' ARKB lost $109.4 million, Grayscale's GBTC lost $29.5 million and Bitwise's BITB lost $27.4 million, while Morgan Stanley's MSBT recorded a $2.3 million inflow. On October 23, IBIT lost a further $110.3 million and FBTC lost $31.8 million. Source figures differ modestly across providers: SoSoValue put the October 22 outflow at $635.49 million, and Lookonchain and Glassnode reported different daily tallies, including a $653 million October 19 inflow against Farside's $526.7 million.
The article stresses that a net ETF flow figure does not show who sold, who bought, or how Bitcoin changed hands. An ETF share can be sold to another investor on the exchange without any change in the trust's bitcoin holdings. Market makers and authorized participants may hold shares, hedge exposure or redeem baskets later, and the redemption route determines whether pressure reaches spot markets. BlackRock's IBIT prospectus permits cash, partial cash or in-kind redemptions at the sponsor's discretion, and the SEC approved in-kind processing for spot crypto products in July 2025, ending the cash-only requirement from the January 2024 launch. Commissioner Mark Uyeda had noted that cash-only structures could force issuers to sell bitcoin to raise redemption cash.
The analysis also cautions against treating outflows as proof of forced selling, while acknowledging that selling pressure can still arise. Glassnode's October 21 research placed the cost basis of U.S. spot ETF and corporate treasury holdings near $80,000 to $81,500, with potential liquidation clusters between $85,000 and $87,500, but that research did not identify the buyers of the October 22 and 23 redemptions. Redemptions that are paid in kind may be sold later by recipients, while cash redemptions may lead the fund or its agent to sell bitcoin directly, and market-maker hedging through futures or spot can also press prices. Timing differences, including the 2 p.m. Eastern in-kind cutoff in BlackRock's prospectus, mean that same-session matching of outflows to sales would be unreliable. The data therefore show that ETF investors withdrew capital during a period of falling bitcoin prices, but not the specific counterparties or trading routes behind those withdrawals.
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