Bitcoin ETFs recorded $635 million in outflows as price nears average holding cost

Largest daily outflow since June

US spot Bitcoin exchange-traded funds (ETFs) lost approximately $635 million in net capital on October 22. An ETF is a type of investment fund that tracks the price of an asset, like Bitcoin, and trades on stock exchanges. This withdrawal marked the largest daily outflow for these funds since June.

The selling reversed nearly 60% of the capital that flowed into the funds over the previous three trading days. Bitcoin prices dropped to as low as $80,841 during this period, placing the asset near a key financial reference point for investors holding these funds.

Key figures and fund performance

• BlackRock IBIT: Led the outflows with $254 million in withdrawals.
• Fidelity FBTC: Recorded $217 million in withdrawals.
• ARK Invest ARKB: Lost $109 million.
• Grayscale GBTC: Saw $30 million in outflows.
• Bitwise BITB: Recorded $27 million in outflows.
• Morgan Stanley MSBT: Was the only fund to attract new capital, gaining about $2 million.

Cost basis and support levels

Data from analytics firm Glassnode suggests that US spot Bitcoin ETFs bought their holdings at an average price of approximately $81,500. Corporate treasuries, which are companies holding Bitcoin directly, hold their coins at an estimated average cost of $80,200.

Glassnode identified the True Market Mean near $77,600 as the next major downside reference level if Bitcoin closes below $80,000. Conversely, concentrated selling orders between $85,000 and $87,500 could limit upward price movement.

Market context and expert views

The outflows occurred against a backdrop of rising oil prices and geopolitical tensions. Brent crude oil rose above $110 per barrel, which has raised concerns about inflation. Financial markets, including US equities, also saw declines, with the Nasdaq Composite dropping 2.6% on Thursday.

Simon-Peter Massabni, head of business development at XS.com, noted that investors are currently seeking short-term trading opportunities rather than long-term holdings. He warned that persistent high energy prices could keep central bank monetary policies restrictive, reducing the money available for speculative investments like Bitcoin.

What happens next

The Federal Reserve is scheduled to make its next policy decision on October 28. Analysts are watching how the current support levels hold up and whether investors will replenish the buy orders that were depleted during the recent selloff.

• CryptoSlate