Key Points

The iShares Bitcoin Trust ETF has recorded $2.2 billion in outflows this month, as of Monday, FactSet data shows.

That’s nearly eight times the $291 million in losses suffered by the investment vehicle last October, or its second-worst month on record since its debut in early 2024.

The outflows come as bitcoin is down more than 20% over the past month.

traders are now pricing in more than 80% odds that the Federal Reserve will slash rates at its December meeting, such a cut remains far from sure bet.

Amid all the uncertainty, bitcoin is bleeding. And, investors in spot bitcoin ETFs, particularly newer holders, are feeling pressure to sell their shares — a reality that could extend the asset’s downside in the near term, Frank Chaparro, head of content and special projects at crypto-focused trading firm GSR, told CNBC.

“With the macro environment becoming less certain, investors tend to de-risk across assets, which often means trimming exposure to crypto and other risk-sensitive stocks,” Chaparro said. “And for newer entrants who came in through the funds, any downturn can be unsettling – they can sell just as quickly as they bought.”

But while it’s true that spot bitcoin ETFs have brought in hoards of new retail investors who may be flighty during volatile times, the funds have also attracted a range of long-term investors such as institutions who can hold through the downturn, according to Joshua Levine, chairman at bitcoin treasury firm OranjeBTC, told CNBC.

That institutional base could “dampen some of the extreme downside, but also smooth upside, reducing bitcoin’s volatility as the asset class matures,” Levine said.