The outflows reflect short-term price movements, not lower institutional demand or structural issues in the Bitcoin market, analysts said.
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The record outflows from Bitcoin exchange-traded funds (ETFs) represent short-term, “tactical” rebalancing rather than institutional flight from BTC, according to analysts at crypto exchange Bitfinex.
Long-term Bitcoin () holders taking profit and selling their coins, and highly-leveraged positions flushing out of the markets, are the root causes of the and the broader market crash, Bitfinex analysts said.
The has also shifted investors to a risk-off outlook, Bitfinex said.
“This does not derail the longer-term move towards institutionalization. The spot ETF channel remains intact, and the outflow likely reflects tactical rebalancing rather than a wholesale exit from the asset class.”
Bitfinex said the structural thesis for Bitcoin remains “firm,” and that Bitcoin is positioned for continued institutional adoption as a store-of-value asset with strong long-term fundamentals. The ongoing drawdown is a short-term price movement, they added.
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Bitcoin ETF , as losses from extended into the month, sparking investor fears of the .
BlackRock’s iShares Bitcoin Trust (IBIT) ETF led the outflows, with over $2.47 billion in redemptions so far in November.
The Bitcoin ETFs posted some of the in November. Single-day outflows crossed $900 million on Thursday, to Farside Investors.
The following BTC’s crash below $90,000. However, this does not mean that ETF investors will panic sell, Vincent Liu, chief investment officer at quantitative trading company Kronos Research, told Cointelegraph.
Bitcoin ETF investors tend to be long-term holders and ignore short-term market noise and price movements, Liu said.
Long-term Bitcoin whales and OGs who hold the asset directly rather than through an investment vehicle are according to senior Bloomberg ETF analyst Eric Balchunas.
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