BTC ETF outflows are 'tactical rebalancing,' not institutional flight: Analysts

Analysts from the crypto exchange Bitfinex argue that the record outflows from Bitcoin exchange-traded funds (ETFs) are indicative of short-term, tactical rebalancing rather than a departure of institutional investors from BTC. They assert that current market dynamics, including profit-taking among holders and the liquidation of highly-leveraged positions, are more to blame for recent outflows than a decrease in long-term demand for Bitcoin. Bitfinex maintains that the overall structural outlook for Bitcoin remains solid, emphasizing its potential as a store-of-value asset. Significant outflows have been observed, especially with BlackRock’s iShares Bitcoin Trust leading with over $2.47 billion in redemptions in November. However, experts like Vincent Liu from Kronos Research suggest that ETF investors typically remain long-term holders who are less affected by short-term price fluctuations. Therefore, the analysts maintain that the Bitcoin ETF market is still set to attract institutional investors despite recent downturns.

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