U.S. spot cryptocurrency exchange-traded funds (ETFs) posted steep net outflows exceeding $530 million on Thursday, erasing recent gains in institutional demand that had followed the U.S. midterm elections. The sudden reversal marks the largest daily withdrawal from the products since September and reflects broader risk-off sentiment rippling through global markets.
According to data compiled by The Block, spot crypto ETFs shed more than $540 million on November 5 as investors pulled capital amid a sweeping $3 trillion Wall Street wipeout that rattled risk assets. The Block Separately, CryptoSlate reported combined outflows of $530 million across Bitcoin and Ethereum funds on the same day, with six distinct products recording withdrawals, leaving the week's earlier demand recovery short-lived. CryptoSlate
The withdrawal wave arrives just as Bitcoin ETFs had demonstrated extraordinary absorption capacity throughout the third quarter. CryptoSlate analysis indicates that Bitcoin ETF inflows during Q3 totaled nearly twice the amount of BTC produced by miners during the same period, highlighting the scale of institutional accumulation that had characterized the latter half of the year. CryptoSlate However, Thursday's activity saw Bitcoin-focused funds alone bleed approximately $430 million, suggesting that the sustained demand required to offset miner sell pressure and older-holder distribution remains unproven under current macroeconomic conditions. The data indicates that while ETFs had previously served as a primary liquidity sink for newly minted coins, this absorptive capacity can reverse quickly when risk appetite diminishes.
Bitcoin’s spot price has stabilized near $75,800 following the release of October employment data that signaled persistent inflationary pressure. The U.S. economy added 165,000 jobs last month, significantly outpacing the 59,000 forecast by economists and pushing market-implied odds for a December Federal Reserve rate hike toward 80 percent. Bitcoin Magazine Higher-rate expectations typically strengthen the dollar and tighten liquidity conditions, creating headwinds for non-yielding assets like cryptocurrencies and potentially explaining the sudden shift from accumulation to redemption in regulated fund products.
The confluence of tightening monetary policy expectations and the post-midterm equity market slide has abruptly curtailed the ETF demand recovery observed earlier in the week. While spot funds had briefly returned to net inflows following the elections, Thursday’s exodus demonstrates that institutional flows remain highly sensitive to macroeconomic catalysts rather than political developments alone. With the November jobs report scheduled for release and December Fed decisions approaching, traders are weighing whether the current liquidity contraction represents a temporary repositioning or the beginning of a more sustained period of capital flight from regulated crypto vehicles.