Bitcoin ETFs Suffer Biggest November Outflows Yet

November has already become the worst month on record for ETF redemptions, with $3.79 billion withdrawn, sending Bitcoin below $82,000 for the first time in seven months. Analysts warn the downturn could deepen as digital asset treasury inflows collapse and investor sentiment weakens. At the same time, Fundstrat’s Tom Lee says the October liquidation shock left major market makers with severe balance-sheet holes, triggering weeks of reduced liquidity, forced selling, and shrinking trading activity. With the unwind only six weeks in, both ETF pressure and market-maker strain may continue weighing on crypto markets in the weeks ahead.

Bitcoin ETFs Hit Hard

US spot Bitcoin ETFs faced yet another dramatic reversal this week by erasing the brief optimism that was sparked by Wednesday’s small inflow. After pulling in $75.4 million midweek, which broke a five-day outflow streak, investors rushed for the exits again on Thursday, and triggered a staggering $903 million in redemptions. According to Farside Investors, this is the largest single-day outflow in November and one of the biggest daily withdrawals since the ETFs launched in January of 2024.

Bitcoin ETF flows (Source: Farside Investors)

The latest moves bring total November outflows to $3.79 billion, putting the month firmly on track to become the worst on record for US spot Bitcoin ETFs unless the remaining days manage an unexpected rebound. November’s redemptions already surpassed the previous high in February, which saw $3.56 billion withdrawn.

BlackRock’s iShares Bitcoin Trust (IBIT) has been the biggest source of the retreat. The fund  shed $2.47 billion so far this month, which is roughly 63% of all outflows across US spot Bitcoin ETFs. IBIT also dominated this week’s withdrawals with more than $1 billion exiting the product alone. CryptoQuant CEO Ki Young Ju pointed out that this marks the fund’s largest weekly outflow in its history.

Fidelity’s Wise Origin Bitcoin Fund (FBTC) ranked as the second-largest contributor to November’s downturn, with $1.09 billion in outflows. Combined, IBIT and FBTC account for a striking 91% of all US spot BTC ETF redemptions this month.

The massive liquidity drain weighed heavily on Bitcoin’s price. Data shows BTC falling to below $82,000 on Friday, its lowest level in seven months and a price zone not visited since April. Analysts warn that the latest drop may only be the beginning of a deeper retracement. Alliance DAO co-founder QwQiao warned about “dumb money” entering the market through ETFs and digital asset treasuries (DATs), and suggests another big drawdown may be needed before the market finds stability.

BTC’s price action over the past week (Source: CoinMarketCap)

Chris Burniske of Placeholder argued that the same DAT and ETF mechanisms that accelerated Bitcoin’s rise could now amplify downside volatility. The trend already seems to be materializing. DefiLlama data shows DAT inflows collapsing to $1.93 billion in October—down 82% from September’s $10.89 billion—after roughly $20 billion in crypto positions were liquidated that month. So far in November, DAT inflows stand at just $505 million.

Market Maker Crunch Pressures Crypto

Tom Lee, chairman of Ethereum-focused treasury company BitMine and co-founder of Fundstrat, believes the latest slump in the crypto market may be tied to deeper structural problems among market makers rather than simple investor sentiment. In an interview with CNBC, Lee argued that the massive Oct. 10 crash—which triggered a record $20 billion in liquidations—severely damaged the balance sheets of several major market makers, leaving them with liquidity gaps that are still rippling through the market weeks later.

According to Lee, many market makers were caught off guard by the speed and scale of October’s liquidation wave. The sudden shock forced them to shrink their operations to conserve capital, while the broader decline in trading activity reduced their revenue even more. 

With less capital coming in and more pressure to stabilize their books, market makers were pushed into a reflexive cycle of reducing exposure, cutting trading activity, and in some cases selling assets to patch holes in their balance sheets. Lee said this feedback loop contributed to the slow “drip” downward movement in crypto prices throughout the past several weeks.

Tom Lee

He also talked about the outsize role market makers play in crypto, and described them as functionally similar to “central banks” due to their importance in maintaining liquidity. When these firms are strained, Lee said, the entire market feels the effect. He warned that the industry may need to endure a bit more pain before conditions begin to improve. 

Drawing parallels to a similar liquidity crunch in 2022, Lee mentioned that it took eight weeks for that environment to fully stabilize. The current unwind is only about six weeks in, which suggests that Bitcoin, Ethereum, and the broader crypto market may stay under pressure for a little longer.