Bitcoin ETFs suffer biggest exodus since June as Ethereum withdrawals hit nine-month high

US spot Bitcoin and Ethereum exchange-traded funds saw their steepest withdrawals in months as the cryptocurrency market continued to decline.

Data from SoSoValue shows that the 12 listed US Bitcoin ETFs lost $484.9 million on Oct. 7, their largest single-day outflow since June 25. BlackRock's iShares Bitcoin Trust (IBIT) led the withdrawals with $207.7 million, followed by Fidelity's FBTC at $105.1 million and ARK 21Shares' ARKB at $101.7 million.

Meanwhile, Ethereum ETFs recorded $160.9 million in withdrawals, bringing their five-session losses to $506.3 million, the largest since January.

BlackRock's ETHA accounted for $116.1 million of Wednesday's redemptions, while Grayscale's ETHE lost $25.8 million. The funds have now experienced seven consecutive trading sessions of outflows, totaling approximately $569 million.

Together, the two ETF categories lost about $646 million on Wednesday as Bitcoin fell to its lowest daily close in the last 20 days, below $83,000, while Ethereum retreated toward $2,500 during the reporting period.

Notably, the price action coincided with rising US Treasury yields, a stronger dollar, and elevated oil prices, adding to pressure on risk assets.

ETF demand was weakening before the latest withdrawals

The latest withdrawals followed signs of weakening institutional demand that Bitfinex analysts had identified before Wednesday's selloff.

In an Oct. 7 report, the analysts noted that Bitcoin ETF flows had become increasingly uneven, with investment slowing sharply after the buying spree that supported September's recovery.

Daily inflows averaged $341.7 million during Bitcoin's mid-September rally from $76,000 to $87,000. However, that figure fell to about $35 million per day over the five trading sessions through Oct. 6, totaling $172.9 million in cumulative net inflows.

The remaining demand was also heavily concentrated in BlackRock's IBIT, which attracted $536.2 million during those five sessions while competing Bitcoin ETFs collectively lost $363.3 million.

That divergence left the market increasingly reliant on a single fund to offset redemptions elsewhere, a source of support that weakened when IBIT joined Wednesday's selling.

The reversal comes as Bitcoin has fallen below the estimated average acquisition price of ETF investors.

Citing Checkonchain data, Bitfinex placed the flow-weighted average ETF cost basis at $84,318. The analysts observed that daily inflows historically moderated toward approximately $65 million as Bitcoin approached investors' aggregate breakeven level.

Wednesday's close under $83,000 has pushed Bitcoin below that threshold, raising the possibility that further declines could prompt additional redemptions as investors seek to limit losses.

Although the estimate does not reflect individual investors' entry prices, it gauges the profitability of capital deployed through the funds.

Ethereum is showing additional signs of weakening demand. Beyond its persistent ETF withdrawals, CryptoSlate previously reported growing demand for short exposure in the derivatives market, with traders holding short positions paying longs through negative perpetual futures funding rates.

The positioning suggests that bearish traders are increasingly willing to incur costs to maintain exposure to further price declines, adding to the pressure reflected in Ethereum ETF redemptions.

Bitfinex also warned that weaker institutional inflows were leaving the broader altcoin market increasingly dependent on capital rotating among existing cryptocurrency positions.

That could leave smaller tokens especially exposed if Bitcoin's decline accelerates, as investors seeking to reduce risk withdraw capital from altcoins instead of rotating into other digital assets.