Bitcoin Spot ETF fund flows turn positive, institutional investors adopt defensive positioning.

Source: PortaldoBitcoin Original Title: Bitcoin ETF Flows Turn Positive, but Experts Warn of Defensive Shift Original Link:

Signs of Relief in Capital Inflow

The Bitcoin spot ETF in the United States broke a five-day streak of net outflows on November 19, achieving a net inflow of $75.47 million, which is a mild stability signal after a period of continuous selling.

This rebound is led by BlackRock's IBIT, contributing $60.61 million in inflows, in stark contrast to the record net outflow of $532.15 million on Tuesday. Following BlackRock's IBIT is the Grayscale BTC fund with an inflow of $53.84 million.

These inflows indicate a potential shift towards bullish sentiment amid macroeconomic uncertainty, following a period of widespread negative flows since the second week of October. The continuous outflows over the past five days highlight the increasingly cautious attitude of institutional investors as the market transitions from a momentum phase to a more cautious stage, with market sentiment firmly entering the fear zone.

Although the outflow sequence is significant, Mansa's product director Wali Makokha stated that it should be viewed against the backdrop of the huge capital wave entering ETFs this year.

“This year we have seen a significant inflow of funds into the US spot Bitcoin ETF, with net inflows exceeding $60 billion since its launch, so a few days of outflows do not mean this story is breaking apart,” Makokha said. “What has really changed is the backdrop: Bitcoin has surged to new highs and then pulled back, while interest rates remain elevated.”

Concerns about the market recovery still exist, as reflected by the outflows from VanEck's HODL and Fidelity's FBTC, with $17.63 million and $21.35 million leaving these funds, respectively.

Defensive Layout Transition

Recently, the scale of ETF redemptions, especially from large funds like IBIT, indicates that institutional investors are reassessing their exposures, said Wenny Cai, COO and co-founder of Synfutures.

“Multiple forces are driving this change,” Cai explained. “Bitcoin has significantly retraced from its October highs, dropping below $90,000 and testing the conviction of new ETF participants who bought near the highs.”

In addition to the price decline, overall risk aversion and concerns about U.S. interest rates are leading to a rotation of risk assets, this analyst explained. There are also signs of active hedging, with the cost of IBIT put options rising to several months high, indicating that some investors are preparing for further declines.

“This pattern suggests that the outflow is not just profit-taking but a shift towards defensive positioning,” Cai said.

Looking to the future, the current pause seems more like a “reset” rather than an end to the demand for ETFs, Makokha added. “The main advantage of these ETFs—providing a regulated way to access Bitcoin through regular brokerage accounts—has not changed.”

If the expectation shifts towards interest rate cuts, “funds may quickly turn positive,” the analyst stated.

Despite the interruption in the outflow sequence, market conditions remain tight. Aside from the weekend, the ongoing downward trend keeps liquidations around a high level of $500 million.

The next few days are crucial for determining the sustainability of the recovery. If macro conditions stabilize, such as clearer signals from the Federal Reserve, institutional inflows may return, Cai said. However, if Bitcoin falls below important technical levels like $90,000, outflows could accelerate.