U.S. Spot Crypto ETFs Shed More Than $500M as Post-Midterm Gains Reverse
Investors pulled more than $500 million net from U.S. spot crypto ETFs on Thursday as markets gave back gains made after the U.S. midterm election results. Major U.S. crypto ETFs have now recorded combined net outflows above $1.1 billion this week.
Fidelity FBTC led bitcoin ETF withdrawals Thursday with $199.9 million, according to The Block. BlackRock IBIT saw $105 million in net outflows, Grayscale GBTC $49.9 million, and Franklin Templeton EZBC, VanEck HODL and Ark Invest ARKB also recorded withdrawals. The remaining bitcoin ETFs had no net flows. Among Ethereum funds, BlackRock ETHA led with $75.2 billion in redemptions and BlackRock ETHB recorded $22 billion; Fidelity FETH and Grayscale ETHE also saw withdrawals.
SoSoValue data showed U.S. Solana ETFs with $1.2 million in combined net outflows for the day, Zcash ETF net withdrawals of $11 million and Hyperliquid ETFs $3 million in net outflows. XRP ETFs had no net flows.
Bitcoin fell 5.6% Thursday, reversing more than the initial 4% gain Wednesday after Tuesday U.S. midterm elections. Ether dropped 7.8%. The GMCI 30 index lost 6.4%. The Nasdaq Composite fell 5.5%, and the S&P 500 dropped 4.4% as investors assessed possible restrictions on AI infrastructure expansion after Democrats won both the House and Senate.
Capital.com senior financial market analyst Kyle Rodda said the Democratic sweep intensified concerns about the AI investment boom. Investors were already questioning technology valuations and the pace of infrastructure spending, he said. Political and regulatory risks emerged when AI-related investments were already vulnerable, Rodda said, citing disappointing earnings and signs that AI spending was slowing.
IG chief technical analyst Axel Rudolph said bitcoin fell alongside AI-related investments as investors rapidly reduced risk across technology and crypto markets. Bitcoin correlation with technology shares left it vulnerable to the selloff, he said. Leveraged crypto liquidations exceeded $1 billion over 24 hours as markets continued falling, according to Rudolph.
U.S. employment data due Friday could create further market difficulties, particularly if the figures strengthen the Fed case for raising rates. Capital.com senior market analyst Daniela Hathorn said economists expect around 60,000 to 65,000 new jobs. Stronger employment figures, especially higher wage growth, could raise Treasury yields and strengthen the dollar, she warned.
Bitwise head of research for Europe André Dragosch expects bitcoin to outperform U.S. equities despite broader market weakness as investors retreat from AI-related investments. Bitcoin now responds more to the dollar and monetary policy expectations than to economic growth, he said. He added that bitcoin could move independently of stocks if financial conditions improve.
