The Daily: BlackRock’s bitcoin ETF posts record outflows, derivatives market forming ‘dangerous’ setup, and more

The following article is adapted from The Block’s newsletter, The Daily, which comes out on weekday afternoons.

Happy Wednesday! Bitcoin has slipped back below $90,000 again as retail capitulation deepens and traders rush for downside hedges, with analysts warning the market sits in a fragile reset phase even as whale buying quietly builds beneath the surface.

In today's newsletter, BlackRock's bitcoin ETF sees record outflows, K33 warns the bitcoin derivatives market is forming a "dangerous" setup, the U.S. Senate banking chair eyes a vote on a crypto market structure bill next month, and more.

Meanwhile, Kraken confidentially files for an initial public offering in the U.S. Plus, Coinbase app code appears to include early prediction market and stock-trading modules.

P.S. Don't forget to check out The Funding, a biweekly rundown of crypto VC trends. It's a great read — and just like The Daily, it's free to subscribe!

BlackRock's bitcoin ETF posts record-setting outflows worth $523 million

BlackRock's U.S. spot bitcoin ETF, IBIT, posted a record $523 million in net outflows on Tuesday, marking its fifth straight day of redemptions and extending a weeks-long negative trend.

• IBIT's outflows outweighed inflows into rival products, leaving all U.S. spot bitcoin ETFs with a combined net outflow of around $373 million for the day.
• Analysts said the withdrawals reflect institutional portfolio rebalancing rather than a permanent shift away from bitcoin, even as the asset trades back below $90,000 after a sharp pullback.
• Market liquidity remains thin following the recent U.S. government shutdown and uncertainty over the Federal Reserve's December rate decision, with traders split over another potential 25-bps cut.
• Spot Ethereum ETFs followed a similar pattern, led by $165 million exiting BlackRock's ETHA and only modest inflows across competitors.
• Meanwhile, the new Solana ETFs extended their 16-day streak of inflows to over $420 million, with analysts citing rising allocator interest in yield-bearing altcoin products.

Bitcoin derivatives market forming 'dangerous' setup amid rapid leverage climb

K33 Head of Research Vetle Lunde warned that bitcoin's derivatives market is entering a "dangerous" setup as traders add aggressive leverage into a deepening correction, creating excess overhang that could amplify liquidation-driven volatility.

• Perpetual futures open interest has jumped by more than 36,000 BTC — the largest weekly rise since April 2023 — while funding rates climbed on hope of a swift bounce that has yet to materialize, signaling aggressive knife-catching behavior rather than defensive positioning, according to the analyst.
• ETF outflows, long-term holder selling, and bitcoin's underperformance versus tech stocks are also intensifying downside pressure as the cryptocurrency hits 7-month lows.
• Lunde said the current structure mirrors past regimes that typically saw further declines, estimating a potential bottom around $84,000 to $86,000 with risk of a deeper move toward April's $74,500 low if selling accelerates.

US Senate banking chair eyes vote on crypto market bill next month

U.S. Senate Banking Committee Chair Tim Scott said he wants the committee to vote on the crypto market structure bill next month and bring it to the floor in early 2026.

• The legislation must clear both the Banking and Agriculture committees as Republicans push to define SEC and CFTC jurisdiction and create a new "ancillary asset" category for non-security tokens.
• The Senate has been working on its own crypto market structure legislation after the House passed its version — the Clarity Act — this summer.
• Amid ongoing bipartisan discussions on the legislation, some Democratic Senators signaled they are ready to move the bill forward.

Saudi real estate firm to tokenize Maldives Trump hotel

Saudi real estate developer Dar Global plans to tokenize up to 70% of its $300 million Trump-branded Maldives resort, offering U.S. investors exposure from the development stage, Reuters reported.

• The firm said tokenization will serve as the project's primary financing mechanism, while it retains a 30% to 40% ownership stake.
• Dar Global and The Trump Organization are in discussions with the SEC about the planned token sale as they push blockchain-based real estate investment to a broader retail base.
• The resort, slated to open in 2028 near Malé, features roughly 80 luxury villas and is one of several joint projects between the firms.

Malaysia uncovers $1 billion in power theft losses from illegal crypto mining

Malaysia's national utility firm, TNB, has uncovered more than $1.1 billion in losses from power stolen by 13,827 illegal bitcoin and other cryptocurrency mining sites since 2020, triggering fresh warnings over grid stability and public safety.

• Authorities said electricity theft tied to crypto mining remains a major threat to the national energy supply, prompting expanded crackdowns and the destruction of hundreds of seized mining rigs.
• TNB is building a database of suspected offenders and rolling out smart meters and transformer-level monitoring to detect abnormal usage and target illicit operations more quickly in a bid to prevent soaring electricity costs.

In the next 24 hours

• LayerZero and Kaito are set for token unlocks.
• Devconnect continues in Buenos Aires.

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Disclaimer: This article was produced with the assistance of OpenAI’s ChatGPT 3.5/4 and reviewed and edited by our editorial team.

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