Bitcoin and Ethereum ETFs Bleed $439M as Options Traders Brace for More Downside
Crypto ETFs hemorrhage nearly half-billion dollars as derivatives markets signal deeper correction ahead.
Market Pulse
Exchange-traded funds tracking Bitcoin and Ethereum bled $439 million in outflows this week—options traders are positioning for further downside pressure. The massive capital flight signals institutional hesitation despite recent regulatory clarity.
Derivatives Dashboard
Put options volume spiked 300% on major crypto derivatives exchanges as sophisticated traders hedge against potential cascading liquidations. The smart money isn't betting against crypto long-term—they're just protecting gains from last quarter's rally.
Wall Street's Cold Feet
Traditional finance firms keep treating crypto like a hot potato—embracing it during bull runs but dumping it at the first sign of volatility. Maybe they're still traumatized by remembering they can't print digital assets like fiat currency.
This isn't a crypto problem—it's a risk management dance. The underlying blockchain infrastructure continues processing transactions flawlessly while Wall Street panics over normal market cycles.
“A phase of profit-taking”
Last week, Bitcoin and Ethereum ETFs attracted $977 million and $772 million respectively, according to CoinShares’ weekly report.
Dean Chen, an analyst at Bitunix, told Decrypt that "the outflows signal a phase of profit-taking and de-leveraging" rather than a structural bear market.
"If ETF flows turn positive within the next 1–3 days, BTC could quickly rebound above $113,000 and ETH toward $4,200," Chen noted. "If outflows persist, BTC may retest $108,000 and ETH could slip to $3,900."
More than $354 million in crypto positions were liquidated in the past day, including $44 million tied to bitcoin and $53 million in Ethereum, according to CoinGlass data.
Investors should closely monitor “ETF flows and derivatives leverage — the key signals for any sustained reversal,” Chen added.
Ruchir Gupta, co-founder of Gyld Finance, echoed the de-leveraging sentiment, telling Decrypt that what the market is seeing is “an exit of leverage that had been built up over the last few weeks.”
Despite the turbulence, he argued that the macro environment for digital assets is still bullish, pointing to the “Fed rate cut, S&P500 and NASDAQ at all-time highs, and the rise of digital asset treasuries.”
A period of “healthy consolidation” could see the market reset from “excess leverage and positioning in the market,” Gupta further cautioned.
Despite near-term bearishness, with put-call delta skew hitting its highest since early August, options traders remain "optimistic about the fourth quarter," Adam Chu, chief researcher at GreeksLive, previously told Decrypt.
