Spot Bitcoin ETFs Experience Significant Outflows Amid Market Dynamics
On December 5, Spot Bitcoin ETFs saw outflows amounting to $194.6 million, marking the highest in two weeks. BlackRock's IBIT fund led the outflows with $113 million withdrawn on that day. This followed $14.9 million in outflows on December 4, after five consecutive days of positive inflows.
During this period, the Bitcoin price remained relatively stable, experiencing a 1.7% decline over 24 hours to about $91,315. It was down 0.5% over seven days and 10.5% month-over-month according to CoinGecko data.
The notable ETF outflows are largely attributed to the unwinding of leveraged positions and basis trades, where investors buy spot ETFs while shorting futures contracts to lock in profits. Analysts Illia Otychenko from CEX.IO and Rajiv Sawhney of Wave Digital Assets International highlighted this basis trade unwinding as a key factor. Arthur Hayes has also previously pointed to basis trades as drivers of ETF outflows.
A significant macroeconomic factor influencing these movements is the market pricing in a possible Bank of Japan rate hike scheduled for December 19. This potential rate increase could pressure yen carry trades, contributing to ETF liquidations. Similar patterns were observed in August 2024 and February 2025, with both periods experiencing Bitcoin price drops alongside ETF outflows.
