US Bitcoin ETFs Face $300M Outflow After Gains

US Bitcoin ETFs saw their first net weekly outflow in a month, losing over $300 million despite ending the week with a small gain. The outflows came after three weeks of steady inflows and indicate a change in market sentiment. Friday's modest inflows couldn’t offset the losses earlier in the week, marking the largest weekly outflow since early September. The sudden reversal coincides with a drop in Bitcoin prices and a broader pullback in the crypto market as the month changed.

According to SoSoValue, total weekly outflows reached over $300 million, reversing three weeks of gains that saw over a billion dollars flow into these funds. The sudden shift in sentiment came after a strong start earlier in the week, where inflows were initially positive. However, significant outflows midweek led to a steep decline, reflecting growing uncertainty among investors. The Bitwise and Fidelity funds posted gains, but they were outweighed by losses in the Grayscale fund, which faced heavy outflows.

US Spot Bitcoin ETFs now hold a combined value of around 5% of the total Bitcoin market cap. The funds started the week with an optimistic outlook, but this quickly reversed as inflows turned into outflows, causing a sharp drop in overall value. By the end of the week, total holdings saw a noticeable decrease compared to late September.

Ethereum ETFs followed a similar pattern, experiencing net outflows despite a positive last day of trading. The funds had seen a small recovery last week, but this was short-lived as outflows resumed, wiping out gains. While Bitcoin ETFs still hold a significant portion of the market, Ethereum ETFs have struggled to maintain positive netflows since launch. The total Ethereum held by US-based ETFs makes up a small percentage of the overall market cap, and the funds have only had two weeks of net inflow since their introduction.

This trend highlights how quickly investor sentiment can shift in the volatile cryptocurrency space. The sudden outflows from both Bitcoin and Ethereum ETFs suggest increased caution among traders, possibly due to shifting economic factors and changing market conditions. The larger outflows in Ethereum ETFs are particularly notable, as they show a lack of confidence compared to Bitcoin, which has fared slightly better in recent weeks.

Overall, the recent outflows underscore a potential shift in the momentum that had been building in crypto ETFs. As investor uncertainty grows, the likelihood of more volatile weeks ahead increases. With the funds now holding a smaller portion of the total market, it remains to be seen whether the recent trend will reverse or continue to signal broader market caution.