"There Was a Reason for Bitcoin's Sharp Drop"…Whales' Record 'Mass Exodus' Sparks Uproar [Maeng Jin-gyu's Global Money Flow]

From 11 Bitcoin spot ETFs

Net outflow this month: 5.4 trillion won

This month, the amount withdrawn from Bitcoin spot exchange-traded funds (ETFs) has been the largest on record.

On the 28th, ETF.com reported that net outflows from the 11 Bitcoin spot ETFs listed on U.S. exchanges totaled approximately $3.6879 billion (about 5.3928 trillion won) through the 24th of this month. This is the largest monthly net outflow on record. It surpassed the net outflow of $3.5604 billion in February, when Bitcoin plunged 22.5%.

Among Bitcoin spot ETFs, the largest by net assets, iShares Bitcoin Trust (IBIT), saw $2.35 billion withdrawn during the period. Large sums also flowed out of Fidelity Wise Origin Bitcoin (FBTC · -$654.94 million) and ARK 21Shares Bitcoin (ARKB · -$231.58 million).

Since being first launched in the U.S. in January last year, Bitcoin spot ETFs have driven the Bitcoin rally. Institutions and corporations are the main demanders of Bitcoin spot ETFs; as they have bought ETFs en masse, Bitcoin's price has risen and investment returns have grown, industry participants say. The key price-determining players have shifted from individuals to institutions.

Lin Tran, an analyst at FX trading platform XS.com, said, "In the first half of this year, Bitcoin spot ETFs helped push Bitcoin to an all-time high, but the recent reversal of institutional capital inflows into sustained outflows has negatively impacted the price."

Marcus Tillen, CEO of 10X Research, said, "Large net outflows from Bitcoin spot ETFs mean that institutional investors have stopped putting new money into Bitcoin," adding, "As long as their selling continues, it will be difficult for Bitcoin to hold up or rebound."

Citi Research analyzed the correlation between ETF fund flows and Bitcoin prices and found that, on average, Bitcoin falls about 3.4% each time $1 billion is withdrawn. Conversely, it rises by a similar magnitude when $1 billion flows in.

Experts say that Bitcoin's direction will also be determined by next month's U.S. central bank (Fed) policy rate decision, because a rate cut would restore risk-on investment sentiment. According to the Chicago Mercantile Exchange (CME) FedWatch, the probability that the Fed will cut the policy rate by 0.25% point in December is 84.9%, sharply up from 39.1% a week earlier.

Nansen research analyst Nikolai Sondergaard said, "The Fed's potential rate cut, ETF fund inflows, or the resumption of corporate buying will be key factors for a market reversal."

Maeng Jin-gyu, reporter maeng@hankyung.com