Outflows from Bitcoin spot ETFs reached a two-week high yesterday, with approximately $194.6 million leaving these funds on December 5. BlackRock’s IBIT ETF, the world’s largest Bitcoin spot ETF by market capitalization, accounted for the largest portion of these outflows, losing $113 million, according to Farside Investors data.
In contrast, Bitcoin spot ETFs had lost $14.9 million on Wednesday, December 4, following five consecutive days of positive inflows, highlighting the recent volatility in investor sentiment.
Bitcoin itself has remained relatively stable over the past week, declining only 1.7% to $91,315 in the last 24 hours and 0.5% over seven days. However, it is still down 10.5% month-over-month, according to CoinGecko data, reflecting ongoing pressure on the broader cryptocurrency market.
Analysts suggest that the recent outflows may reflect investors unwinding “base trades.” Ilya Otishchenko, senior analyst at CEX.IO, explained that base trades are strategies used by institutions like hedge funds and investment banks, where they buy Bitcoin spot ETFs while simultaneously shorting them through futures contracts or similar instruments to generate low-risk profits. Former BitMEX CEO Arthur Hayes also confirmed that these trades have been the primary driver behind the large outflows from Bitcoin spot funds in recent months.
Rajeev Sawhney, Head of International Portfolio Management at Wave Digital Assets International, added that a significant portion of the current selling pressure comes from institutions closing out their underlying positions. However, he believes this liquidation phase is nearing its end, stating, “We were heading towards a market rebound, and we will see a gradual stabilization of prices as the new year begins.”
Macroeconomic factors are also playing a role in these ETF outflows. Otishchenko noted growing expectations that the Bank of Japan will raise interest rates on December 19, which is putting pressure on the yen interest rate trade. This strategy involves borrowing low-cost funds in Japan and investing them in higher-yielding assets.
Otishchenko further explained that during August 2024 and February 2025, Bitcoin experienced sharp, temporary declines of up to 20%, coinciding with increased ETF inflows driven by similar concerns about changes in the yen interest rate environment. This pattern suggests that the cryptocurrency market remains highly sensitive to external macroeconomic fluctuations, in addition to its own internal dynamics.
