Key Takeaways
- For the first time since their launch, average US spot Bitcoin ETF investors are experiencing unrealized losses as Bitcoin’s price falls below the flow-weighted cost basis.
- Bitcoin ETFs have seen significant outflows for five consecutive days, totaling $254.6 million on Monday alone.
- Spot Ether ETFs are also experiencing substantial outflows, with BlackRock’s iShares Ethereum Trust ETF seeing $193 million exit in one session.
- In contrast, Solana ETFs continue to attract positive inflows, marking a consistent trend since their introduction in late October.
Bitcoin ETF Investors Face Unrealized Losses
The recent sharp downturn in Bitcoin’s price has pushed the average investor in US spot Bitcoin Exchange-Traded Funds (ETFs) into negative territory for the first time since these products debuted. The collective cost basis for US Bitcoin ETFs, weighted by investor flows, now stands near $89,600. Bitcoin’s price dipped below this level on Tuesday, resulting in an unrealized loss for this investor group, according to Glassnode analyst Sean Rose.
💡 Despite the average ETF cost basis being higher than the current spot price, many ETF holders are considered long-term allocators. This suggests that being temporarily underwater may not necessarily prompt immediate sell-offs.
The current market sentiment, characterized by a risk-off environment, places significant importance on liquidity and macroeconomic factors. Tight liquidity conditions can exacerbate losses and increase downward price pressure, while signals indicating economic easing could potentially alleviate this pressure and encourage investment inflows.
Spot Bitcoin and Ether ETFs Experience Significant Withdrawals
On Monday, US spot Bitcoin ETFs continued a trend of outflows for multiple consecutive days, recording a combined $254.6 million in withdrawals. Farside Investors data shows that BlackRock’s iShares Bitcoin Trust (IBIT) led these outflows with $145.6 million, followed by Fidelity’s Wise Origin Bitcoin Fund (FBTC) with $12 million. Other notable outflows include the ARK 21Shares Bitcoin ETF (ARKB) shedding $29.7 million and the Bitwise Bitcoin ETF (BITB) losing $9.5 million.
📌 This marks the fifth consecutive day of outflows, which began on November 12th with $278.1 million. The situation intensified on November 13th, when Bitcoin ETFs experienced outflows of $866.7 million, representing the second-worst day on record for these products. Further withdrawals continued on November 14th, with $492.1 million exiting.
Spot Ether (ETH) ETFs also faced substantial outflows on Monday, with total withdrawals amounting to $182.7 million, according to Farside Investors. BlackRock’s iShares Ethereum Trust ETF (ETHA) was the most affected, seeing $193 million depart in a single trading session.
A shift in market dynamics is anticipated with clear signs of disinflation, moderate labor market softening, and central bank communications leaning towards easing rather than prolonged high interest rates. Such signals are expected to improve liquidity expectations, reduce volatility, and encourage capital rotation back into these assets.
Solana ETFs Maintain Upward Momentum with Consistent Inflows
In contrast to the broader market trends affecting Bitcoin and Ether ETFs, Solana (SOL) ETFs have sustained their positive inflow streak, continuing to attract new capital on Monday. The Bitwise Solana Staking ETF (BSOL) recorded $7.3 million in new investments, while the Grayscale Solana Trust ETF (GSOL) added $0.9 million.
âš¡ These Solana-focused funds have consistently seen inflows since their launch in late October, accumulating approximately $390 million in net inflows across BSOL, VSOL, and GSOL.
Expert Summary
The current market for US spot Bitcoin ETFs shows investors collectively facing unrealized losses for the first time due to recent price declines. This trend is accompanied by significant outflows from Bitcoin and Ether ETFs, while Solana ETFs continue to attract consistent investment, highlighting divergent market sentiment across different digital asset products.
