Continued net outflows of BTC and ETH spot ETFs as US midterm election regulatory concerns heat up

According to Woofun AI, regulatory uncertainty caused by the US midterm elections directly impacted the crypto asset market, causing BTC and ETH spot ETFs to experience continued capital withdrawals. Since November 5, these two types of ETFs have shown a net outflow trend for several consecutive trading days, with a cumulative outflow amount of about US$1,421 billion (approximately 2,255 billion yen), reflecting the sensitive reaction of institutional investors to macroeconomic policy risks.

Judging from the specific flow of capital, the market performance on November 9 was particularly intense. On the same day, the net outflow of BTC spot ETFs was about $201 million, and the net outflow of ETH spot ETFs was about $185 million. Together, the net outflow of the two was about $386 million. Within the BTC spot ETF, BlackRock (BLK.US)'s IBIT became the main outflow source, with a net outflow of about US$213 million in a single day, which surpassed the net outflow of all other BTC ETF products combined; in contrast, MSBT by Morgan Stanley (MS.US) was the only exception, which recorded a net inflow of $22.06 million. In terms of ETH spot ETFs, BlackRock's ETHA had the largest outflow of around $119 million.

It is worth noting that on November 5, as the starting day of continuous outflows, US stocks fell sharply due to market concerns that AI infrastructure investment would face stricter regulation. On that day, the net outflow of BTC spot ETFs was about US$430 million, and the net outflow of ETH spot ETFs was US$99.97 million. As a result, the cumulative net outflow of BTC spot ETFs reached about US$1,282 million last week.

According to data compiled by Woofun AI, as of November 9, the cumulative net outflow of BTC spot ETFs since the beginning of this year was about 1.1 billion US dollars; judging from the pace, the net outflow since November 2 was about 1.5 billion US dollars, and the current round of withdrawals was concentrated in nearly a week. In the same period, IBIT had a net outflow of 7 consecutive trading days from October 30 to November 9, with a cumulative total volume of US$1.66 billion.

Entering November 10, the market's focus turned to inflation data. The US Bureau of Labor Statistics announced on the same day that the October CPI rose 0.4% month-on-month and the core CPI rose 0.3% month-on-month, both higher than market expectations of 0.3% and 0.2%; due to the shutdown of the federal government in October last year, no year-on-year data was released. After the data was released, the market's bet on the Federal Reserve's December rate hike was further strengthened. BTC fell 2.09% to $73,796 on the same day, and ETH fell 3.84% to $2,053. As of press release, the full caliber of the ETF redemption data for November 10 has not been released.

Until the path of inflation and interest rates is clear, the capital side of crypto ETFs still lacks stable return conditions. ETH has declined significantly more than BTC since mid-October, and capital outflows are less willing to allocate it in this round. This difference has not changed due to single-day data.

This continuous outflow marks the vulnerability of the crypto ETF market in the macropolitical cycle. This is another large-scale reallocation of institutional funding since the beginning of the year due to adjustments in policy expectations. As the dust settles in the midterm elections, the clarity of the regulatory framework will be a key variable in determining the pace of capital return, and the market needs to be wary of the risk of short-term fluctuations shifting to long-term trends.