Despite October’s $20 billion crypto crash, Bitcoin ETFs saw limited outflows — suggesting internal market forces are driving the sell-off.
The recent Bitcoin market downturn, which erased nearly 20% of BTC’s value in October, has left investors searching for culprits. While many pointed fingers at Bitcoin exchange-traded funds (ETFs), new data shows that ETFs are not the main source of selling pressure. Instead, analysts argue that long-term Bitcoin holders and whales have been the ones offloading their assets during the crash.
ETF Outflows Remain Modest Amid Market Chaos
According to Bloomberg ETF analyst Eric Balchunas, total outflows from Bitcoin ETFs amounted to roughly $722 million over the past month — a relatively small figure compared to the broader market’s volatility. ETFs even saw a $240 million inflow on Thursday, breaking a six-day outflow streak.
The remark underscores a growing consensus that institutional ETF investors remain steady, while internal market participants, including whales and early adopters, are driving the sell-off.
Whales and Long-Term Holders Lead the Selling
Data from CryptoQuant revealed that long-term holders, defined as those holding BTC for 155 days or more, sold around 405,000 BTC in October — valued at over $41.3 billion at the time. This mass selling event coincided with a $20 billion liquidation wave that became one of the largest in crypto history.
This pattern suggests profit-taking behavior rather than ETF-driven panic. Analysts highlight that ETF investors typically adopt longer-term, rule-based investment strategies, unlike speculative traders reacting to short-term market swings.
ETFs Help Stabilize Price Floors
While short-term volatility remains high, Bitcoin ETFs are acting as a stabilizing force. Institutional capital inflows are creating a price floor by absorbing excess supply from speculative markets.
A Charles Schwab survey conducted in mid-2024 found that nearly half of ETF investors planned to allocate funds to crypto ETFs, surpassing interest in commodities and emerging markets.
Despite the sharp correction, Bitcoin ETF investors continue to show resilience, reflecting growing institutional conviction in Bitcoin’s role as a store of value and macroeconomic hedge. As analysts emphasize, the current sell-off is not ETF-driven, but rather “coming from inside the house” — a wave of long-term holders and whales reshaping market dynamics from within.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.