Bitcoin's recent sharp decline has resulted in the average US spot Bitcoin exchange-traded fund (ETF) investor experiencing losses for the first time since these products were introduced.
According to Glassnode analyst Sean Rose, the flow-weighted average cost basis for all US Bitcoin (BTC) ETFs is currently around $89,600. Bitcoin fell below this level on Tuesday, placing ETF investors in an unrealized loss position. However, some early investors who purchased Bitcoin when its price was between $40,000 and $70,000 remain in profit.
Vincent Liu, Chief Investment Officer at quantitative trading firm Kronos Research, commented that even with the average ETF cost basis exceeding the current spot price, most ETF holders are long-term investors. He believes that being underwater does not necessarily trigger immediate sell-offs.
Liu further explained that in the current risk-off market environment, liquidity and macroeconomic factors are the primary drivers of price action. He noted that tight liquidity conditions can exacerbate downside pressure, while clear signals of easing monetary policy tend to lift asset prices.
Spot Bitcoin and Ether ETFs Experience Significant Withdrawals
US spot Bitcoin ETFs continued to see substantial outflows on Monday, marking a multiday trend. Data from Farside Investors indicates a combined outflow of $254.6 million. BlackRock's iShares Bitcoin Trust (IBIT) recorded withdrawals totaling $145.6 million, while Fidelity's Wise Origin Bitcoin Fund (FBTC) experienced outflows of $12 million. Other ETFs also saw notable outflows, with ARK 21Shares Bitcoin ETF (ARKB) losing $29.7 million and the Bitwise Bitcoin ETF (BITB) shedding $9.5 million.
These figures represent the fifth consecutive day of outflows, beginning on November 12th when Bitcoin ETFs saw $278.1 million withdrawn. The following day, November 13th, experienced an even larger outflow of $866.7 million, making it the second-worst session on record. Withdrawals continued on November 14th with $492.1 million leaving the products.
Spot Ether (ETH) ETFs also faced significant outflows on Monday, with a combined total of $182.7 million withdrawn, according to Farside Investors. BlackRock's iShares Ethereum Trust ETF (ETHA) was the most affected, seeing $193 million exit in a single trading session.
Liu anticipates a market shift driven by clear signs of disinflation, softening labor market data without significant negative impact, and central bank communications that lean towards easing monetary policy rather than maintaining a "higher for longer" stance. He suggests that once these indicators align, liquidity expectations will improve, volatility will decrease, and investment flows are likely to rebalance.
Solana ETFs Maintain Positive Inflow Streak
In contrast to the broader market trend, Solana (SOL) ETFs have continued to show resilience, recording another day of positive inflows on Monday. The Bitwise Solana Staking ETF (BSOL) attracted $7.3 million in new investments, while the Grayscale Solana Trust ETF (GSOL) saw an additional $0.9 million.
These Solana ETFs have experienced inflows every day since their launch in late October. This consistent performance has resulted in cumulative net inflows across BSOL, VSOL, and GSOL reaching approximately $390 million.