Bitcoin falls to two-month low as investors pull billions from spot ETFs

By Sidhartha Shukla

 

Bitcoin slumped to fresh two-month lows in early Asia trade as sentiment continues to sour around the largest cryptocurrency and investors pull money out of exchange-traded funds for the token. 

 

Bitcoin fell as much as 3.9 per cent to $81,102 Friday in Singapore, its weakest since Nov 21, extending a rout that gathered pace overnight. It is now down more than 34 per cent from an all-time high reached on Oct 6. Over $1.5 billion in bullish positions across all tokens have been liquidated in the past 24-hours, according to CoinGlass data. 

 

The 12 US-listed spot Bitcoin ETFs have recorded three consecutive months of net redemptions which, if the trend holds through the end of January, will mark the longest sustained run of outflows since these vehicles launched in 2024. Some $4.8 billion has been drained from the products over that period, according to data compiled by Bloomberg.   

 

 

Bitcoin’s malaise contrasts with the recent surge in gold and other precious metals, as investors seeking refuge from geopolitical uncertainty shun cryptocurrencies in favor of traditional safe-haven assets. That’s raising doubts over claims the token functions as a kind of “digital gold.”

 

“Suddenly, cryptocurrencies no longer appear to be an alternative to fiat money and a hedge against the not-so-responsible financial policies of major countries,” said Alex Kuptsikevich, chief market analyst at FxPro. 

 

Fund flows underscore the shift. BlackRock’s iShares Bitcoin Trust, the largest Bitcoin ETF, and one of the most successful fund launches ever, has fallen behind BlackRock’s Gold ETF in total assets. 

 

One way to assess whether Bitcoin is fulfilling its potential as digital gold is to measure its value in the precious metal itself. On that metric it is failing, slumping some 60 per cent in gold terms from a late 2024 peak.   

 

For some traders, the latest slide points to more pain for Bitcoin, with the potential for a break below $80,000 if bearish sentiment persists into the weekend.

 

“I wouldn’t be shocked to see BTC trade in the $70,000 range soon,” said Adam McCarthy, a research analyst at Kaiko. If it falls below $80,000 today “it could continue to slide into the weekend and with lower liquidity on these days that could have an outsized impact,” he said.

 

Tony Sycamore, market analyst at IG Australia, said the latest selloff is in line with his view that the advance from November’s low was a corrective or counter-trend rally. 

 

“Its decline overnight suggests the downtrend has now resumed,” he said.