CHONGQING, CHINA - JULY 17: In a photo illustration, a Bitcoin (BTC) coin is held in front of a screen showing Bitcoin's latest price movements on July 17, 2025, in Chongqing, China. (Photo illustration by Cheng Xin/Getty Images)
The iShares Bitcoin Trust ETF has seen $2.2 billion in outflows this month, according to FactSet data as of Monday. This amount is nearly eight times the $291 million lost last October, marking its second-worst month since its debut in early 2024.
BlackRock's spot bitcoin exchange-traded fund is currently experiencing its most challenging month, largely due to Bitcoin's most significant monthly drop in over three years.
These outflows accompany a decline in Bitcoin's value, which was last trading at $87,907.10 — down more than 20% this month and more than 40% from its early October peak of just over $126,000. November is proving to be Bitcoin's worst month since June 2022 when the asset's price plummeted by about 39%.
Jay Hatfield, CEO and portfolio manager at Infrastructure Capital Advisors, commented to CNBC, "There's no doubt that hot-money investments have had significant outflows." He added, "The pullback is really focused on the gambling part of the market ... and Bitcoin is really the poster child for that."
Investors are moving away from BlackRock's fund to adopt more risk-averse assets like gold amid rising economic uncertainties and signs of waning market sentiment.
A University of Michigan survey recently showed consumer sentiment has plunged to near record-low levels. Investors are also awaiting crucial data from the September retail sales and producer price index reports, which are due on Tuesday. Furthermore, the CME FedWatch Tool indicates that traders are pricing in more than 80% odds that the Federal Reserve may cut rates in December, yet this remains uncertain.
Amidst this uncertainty, Bitcoin continues to decline. Investors in spot bitcoin ETFs, particularly recent holders, are pressured to sell their shares, potentially extending Bitcoin's downside in the near term, according to Frank Chaparro, head of content and special projects at crypto-focused trading firm GSR, who spoke to CNBC.
Chaparro noted, "With the macro environment becoming less certain, investors tend to de-risk across assets, which often means trimming exposure to crypto and other risk-sensitive stocks. And for newer entrants who came in through the funds, any downturn can be unsettling – they can sell just as quickly as they bought."
However, while it's true that spot bitcoin ETFs have attracted many new retail investors who may be skittish during volatile times, the funds have also engaged a range of long-term investors, including institutions that can endure downturns. Joshua Levine, chairman at bitcoin treasury firm OranjeBTC, told CNBC.
Levine suggested that this institutional base might "dampen some of the extreme downside, but also smooth upside, reducing Bitcoin's volatility as the asset class matures."