Bitcoin ETF Investors Sink Into The Red Just As New Crypto ETF Launch Wave Nears

US spot Bitcoin ETF investors fell into the red on average yesterday just as a new round of crypto ETF launches approaches.

Bloomberg estimates show cumulative spot ETF inflows carry an average cost basis near $89,600, while Bitcoin briefly traded below that level yesterday before recovering above $91,000 early Tuesday.

The shift comes just as issuers finalize preparations for a new wave of crypto ETF launches, including products tied to Dogecoin, Solana and XRP.

Spot Bitcoin ETFs Bleed $2.8 Billion In November

The slump in the BTC price has coincided with accelerating redemptions, with about $2.8 billion withdrawn from spot Bitcoin ETFs so far in November and net outflows extending to four straight sessions, according to Bloomberg and Farside data.

The biggest of those outflows happened on Nov. 13, when a total of $866.7 million exited the investment products in a single day.  

In the latest trading session, the BTC products saw net daily outflows of $254.6 million. The majority of these outflows were posted by BlackRock’s IBIT, which saw $145.6 million outflows on the day. 

US spot BTC ETF flows (Source: Farside Investors)

Market Prepares For Launch Of Several Altcoin ETFs

The market could soon receive a liquidity boost from the upcoming launches of mulitiple spot crypto ETFs. 

With the US government shutdown finally over, ETF issuers are rushing to get prepared for their product launches. In the next few days, analysts predict that ETFs for Dogecoin (DOGE), Solana (SOL) and XRP will launch in the market, and four XRP ETFs may launch in the next seven days. 

VanEck’s VSOL ETF has made its market debut, and Fidelity’s FSOL fund is expected to debut today. 

Diamond-Hand Investors Are Buying Up Supply As The Bitcoin Price Drops

While institutional investors continue to withdraw funds from spot Bitcoin ETFs, long-term investors who have held on to their crypto through wild price swings, often called “diamond-hand” investors, have been buying the dip.

According to an analysis by the on-chain intelligence firm CryptoQuant, the number of BTC bought by permanent holder addresses has soared from 159,000 BTC to 345,000 BTC since Oct. 6. This is the highest level of accumulation seen in recent cycles.

”Long-term capital is stepping in aggressively, while short-term sentiment is capitulating,” it said.

When that happens, it usually sets the stage for one of two outcomes: either a meaningful rally, or a final leg down, the analysis said.

One thing that’s sure, it added, is that either outcome ”tends to resolve with force.”