Bitcoin Bulls Battle to Prevent Second-Worst Monthly Performance for ETFs

Bitcoin bulls are currently embarking on a serious endeavour: to funnel close to a cool billion USD into US-listed ETFs (Exchange-Traded Funds). If they succeed, they would be able to forestall these publicly listed investment vehicles from noting their second lowest performance on record.

The Rise of Bitcoin ETFs

In 2024, Nasdaq listed eleven bitcoin ETFs that allowed investors to gain exposure to the popular cryptocurrency without the demands of self-custodial arrangements. With this initiative, investors were given the opportunity to engage with bitcoin as a financial asset without the challenges and security risks of managing their personal bitcoin accounts. Since this innovative opportunity was unveiled, these funds have collectively garnered a staggering $53.9 billion from investors.

Challenge on the Horizon

The month of October, however, has been a different ball game for bitcoin investors and the ETFs they invest in. Cumulatively, these funds have registered a net outflow close to $1 billion, making it the second-largest outflow since their establishment. This record is only second to the earlier outflow of $3.56 billion reported in February, according to data from financial analytics service SoSoValue. If this trend ensues, it would spell the end of four months of unbroken inflow into the bitcoin ETFs. This decrease in uptake has been identified by market analysts as one of the leading factors for the unimpressive bitcoin market performance in October 2024.

Bitcoin’s Price Performance

Earlier in the month, the spot price of bitcoin went as high as a record-shattering $124,000. Presently, however, its value sits just a little above $100,000, which suggests a significant dip in recent times. This month of October could record the second-largest outflow in bitcoin ETF history, compared with a $3.5 billion peak in the month of February during the U.S. tariff debacle. According to financial service company Matrixport, the seasonal headwinds that typically affect the market may not persist, however, they are signifiers that market flow and seasonality have impacts on financial performance.

What the Future Holds for Bitcoin

Despite the current stumbling blocks, there is a consensus belief among market analysts and investors that bitcoin will continue to rise in value, with potentials of breaking the $150,000 mark by the end of the year. To actualize this price target, the cryptocurrency would require considerable inflows, says Markus Thielen, founder of economic research company 10x Research. Thielen also believes that the value of bitcoin would not surge merely by virtue of its macro narrative; sustained capital flow is a prerequisite. “To reach $150,000, Bitcoin would require roughly $404 billion in total inflows this year – meaning an additional $173 billion between now and year-end,” he adds. Note that compared to bitcoin, Ethereum ETFs have seen a net inflow of $3.23 billion, extending an unbroken streak since April. Tobe concluded, the future outlook of bitcoin’s performance in the financial market hang in the balance and would largely depend on sustained and significant capital inflow into the ETFs, which in turn would impact the leading cryptocurrency’s price and market value.