Add $358M Bitcoin ETF Outflows, Gold Ties to Traders

Main Receptors:

The release of the Bitcoin ETF and the 31% decline from the peak raised doubts, but indicators indicate that institutional investors are not abandoning Bitcoin.

Bitcoin's changing relationship with gold and stable volatility suggest that price behavior remains intact despite short-term market pressure.

Bitcoin (BTC) gained 3% on Tuesday after trading around the $85,000 level on Monday. The increase in outflows from the space indicates a softening of institutional investors' interest in Bitcoin since October 10. This reduces the chance of Bitcoin trading above $100,000 by the end of the year.

Spot Bitcoin ETFs recorded net outflows of $358 million on Monday, marking the largest daily outflow in more than three weeks. The move fueled speculation that institutional investors may be reducing exposure after the psychological $90,000 support level was breached.

After all, Bitcoin is currently trading 31% below its all-time high of $126,219, which may signal the end of the bullish phase that extended back to October.

According to X user ‘forcethehabit', BTN's decline does not represent a trend reversal, as interest rate cuts have been delayed and the US Federal Reserve (Fed) has reduced its balance sheet more than expected. The analysis suggests that as institutional capital has flowed in primarily through ETFs and corporate reserves, a shift to riskier and more illiquid assets has not yet materialized.

Bitcoin shows an inverse relationship with gold

Bitcoin's correlation to the price of gold is used to assess whether the cryptocurrency is considered an alternative store of value or simply a proxy for high-risk assets. The digital gold narrative is an important driver of Bitcoin's upside throughout 2025.

How Bitcoin tracks weekly movements in the price of gold is more important than the 48% underperformance since July. The 60-day correlation indicator has oscillated between positive and negative since May, indicating little consistency between Bitcoin and gold price trends. Still, there is no doubt that Bitcoin traders are disappointed by the rejection following the loss of the $110,000 level.

At first glance, such data may seem weak, but the 31% drop in Bitcoin's price since October had no effect on the correlation coefficient. This undermines the argument that institutional investors have changed their perception of risk. Bitcoin can succeed as an independent and decentralized financial system, even as gold remains the world's largest store of value, with an estimated market capitalization of $30 trillion.

It also seems premature to conclude that institutional money has abandoned bitcoin based on a 10-week correction, especially since bitcoin has outperformed the S&P 500 index by 7 percent over the past 18 months. Although that difference may seem modest, the risk profile of Bitcoin options matches that of Nvidia (NVDA US) and Broadcom (AVGO US), two of the world's eight largest companies by market value.

Bitcoin options implied volatility increased by 53% in November, matching current Tesla (TSLA US) levels. When traders anticipate sharp price volatility, this measure increases to reflect the higher premiums they pay on calls and put options. Market makers reduce exposure when there are more sudden price movements. However, this does not necessarily mean that investors have turned into parishioners.

Currently, there is no indication that institutional investors have given up on their expectations of Bitcoin reaching $100,000 in the near future. Correlation and volatility metrics suggest that Bitcoin's price behavior has not changed materially following the 30% drop, meaning that net outflows of ETFs for a few days should not be of much concern. The effects of the recent liquidity infusion from the US Fed have yet to be reflected in the markets, making it too early to judge Bitcoin's performance.

This article is not intended for general information purposes and should not be construed as legal, tax, investment, financial or other advice. The views, ideas and opinions expressed herein are solely those of the author and do not necessarily represent the views and opinions of Cointelegraph. While we strive to provide accurate and up-to-date information, Cointelegraph does not guarantee the accuracy, completeness or reliability of any information in this article. This article may contain forward-looking statements that are subject to risks and uncertainties. Cointelegraph shall not be liable for any loss or damage arising from reliance on this information.