Spot Bitcoin exchange-traded funds continued to see net redemptions on Thursday, losing $434 million as part of nearly $1 billion withdrawn over the past two days. Data from SoSoValue show Thursday’s $434 million in outflows followed $545 million in redemptions on Wednesday. A $561 million inflow on Monday was not enough to offset those losses, leaving weekly net outflows of roughly $690 million as of Friday morning.
The latest ETF withdrawals coincided with a sharp drop in BTC’s market price. CoinGecko data show Bitcoin briefly touched $60,000 — the lowest level since October 2024 — before recovering, a move that has left parts of the community scrambling to identify clear triggers.
Since their January 2024 debut, spot Bitcoin ETFs have been hailed as a major step toward institutional adoption. But critics argue the products may also have unintended negative effects. Some analysts claim ETFs and related derivatives have blurred the link between on-chain supply and market exposure, effectively creating “paper” or synthetic Bitcoin positions that can be traded multiple times over.
Technical analyst Bob Kendall summed up that view on social media, saying the same 1 BTC can now underlie ETF units, futures contracts, perpetual swaps, options deltas, broker loans and structured notes simultaneously — a setup he described as akin to a fractional-reserve pricing system rather than a true market.
Similar concerns were raised before ETFs launched. Josef Tětek, a Bitcoin analyst at hardware-wallet maker Trezor, warned such products could enable creation of large amounts of unbacked Bitcoin exposure, which in turn might weigh on the price of actual coins.
Despite the recent outflows, spot Bitcoin ETFs remain sizable: SoSoValue reports about $81 billion in total assets under management and approximately $54.3 billion in cumulative net flows since launch. Altcoin-focused ETF flows were mixed for the same period, with Ether funds seeing $80.8 million in outflows while XRP and Solana ETFs recorded modest inflows of $4.8 million and $2.8 million, respectively.
Market participants and analysts are divided on how much ETF activity is driving price moves. Some point to ETF liquidity and institutional demand as stabilizing, while others argue the proliferation of synthetic exposures can amplify volatility and decouple market prices from on-chain scarcity. The debate over ETFs’ long-term impact on Bitcoin’s market structure is likely to continue as inflows and outflows fluctuate.