Bitcoin exchange-traded funds (ETFs) continued to see outflows on Thursday, shedding almost $1 billion over the past two days as debate grows over their potential impact on the market.
Data from SoSoValue shows that spot Bitcoin (BTC) ETFs recorded $434 million in net outflows on Thursday, following $545 million in redemptions the previous day.
Monday’s $561 million in inflows was not enough to offset losses, leaving net weekly outflows at about $690 million as of Friday morning.
The latest withdrawals came amid a sharp drop in Bitcoin’s price, which briefly touched $60,000 for the first time since October 2024, according to CoinGecko.
The community has struggled to identify clear catalysts for the downturn, and some have started to criticize Bitcoin ETFs even as analysts point to their resilience.
ETFs face “paper Bitcoin” criticism
The launch of spot Bitcoin ETFs in January 2024 was one of the most anticipated events in Bitcoin history, and was widely expected to accelerate BTC adoption through institutionalization.
Some analysts, however, argue that the institutionalization of Bitcoin via ETFs may have done more harm than good, claiming it contributed to undermining the asset’s scarcity — a key feature of Bitcoin’s fixed supply of 21 million coins.
“The same 1 BTC can now support an ETF unit, a future contract, a perpetual swap, an options delta, a broker loan, a structured note. All at once,” Bob Kendall, technical analyst and author of The Kendall Report, said in a Wednesday X post.
“That is not a market. That is a fractional reserve price system,” he added.
Kendall’s concerns echo those previously raised by his peers about Bitcoin ETFs becoming a tool for Wall Street to “trade against” Bitcoin.
Before crypto ETFs launched, Josef Tětek, a Bitcoin analyst at hardware wallet provider Trezor, warned that such products could enable the “creation of millions of unbacked Bitcoin,” potentially depressing the value of actual Bitcoin.
Related: BlackRock’s IBIT hits daily volume record of $10B amid Bitcoin crash
As of Friday, total assets in spot Bitcoin ETFs stood at about $81 billion, with cumulative net flows totaling $54.3 billion, according to SoSoValue.
Altcoin ETFs showed a mixed picture, with Ether (ETH) funds shedding $80.8 million in outflows, while XRP (XRP) and Solana (SOL) ETFs saw minor inflows at $4.8 million and $2.8 million, respectively.
Magazine: Bitcoin’s ‘miner exodus,’ UK bans some Coinbase crypto ads: Hodler’s Digest, Jan. 25 – 31
