Investors pulled a staggering $643 million from United States-listed spot Bitcoin exchange-traded funds (ETFs) on Friday, abruptly pushing October’s net flows into negative territory as broader cryptocurrency markets reeled from severe volatility sparked by a massive security breach at Binance, the world’s largest digital asset exchange by trading volume.
Friday’s heavy withdrawals decisively snapped a streak of four consecutive days of net inflows into the funds. The single-day redemption wave was large enough to drag the entire month of October into a net outflow position of $515 million, marking the first negative month for the asset class since June, according to data compiled by SoSoValue. Despite this sharp late-month reversal, the spot Bitcoin ETFs have maintained a resilient performance over a longer horizon, still managing to attract approximately $361 million in net inflows for the year through the end of October.
The pressure on Friday was widespread across major issuers, with institutional-grade products bearing the brunt of the liquidations. BlackRock’s iShares Bitcoin Trust (IBIT) led Friday’s outflows by a significant margin, shedding $234 million. It was closely followed by Fidelity’s Wise Origin Bitcoin Fund (FBTC), which experienced $201 million in net withdrawals, according to data from Farside Investors. Other spot Bitcoin funds also saw varying degrees of capital flight as risk-off sentiment gripped traditional and institutional investors alike.
This dramatic capital exodus followed a sharp correction in the underlying cryptocurrency market. Bitcoin’s price dropped to $77,000 on Thursday, rattling investor confidence. The downward pressure was severely exacerbated on Friday when Binance confirmed that hackers had successfully stolen about $6.3 billion in crypto assets from the platform. The staggering scale of the exploit sent shockwaves through the digital asset ecosystem, triggering immediate panic selling and heightened scrutiny surrounding crypto custody and exchange security infrastructure.
Compounding the anxiety surrounding institutional custody models, Yishi, the founder and CEO of hardware wallet maker OneKey, took to social media platform X on Friday to issue a public warning. Yishi cautioned that major institutional vehicles like BlackRock’s IBIT could potentially face similar security threats because the fund relies heavily on crypto exchange Coinbase to securely hold and manage its underlying Bitcoin reserves. The warning added fuel to an already volatile market discussion regarding centralization risks and the security protocols employed by custodians managing billions of dollars in institutional wealth.
The contagion from the market turmoil was not confined to Bitcoin products alone. Digital asset investors simultaneously pulled a net $156 million from US spot Ether (ETH) ETFs on Friday. This final push of redemptions brought October’s total net outflows for Ether funds to a record-shattering $1.61 billion, easily surpassing the previous monthly high water mark of $1.42 billion, which was set in November 2025.
Furthermore, October’s unprecedented wave of withdrawals completely wiped out all accumulated gains for the Ether funds earlier in the year. The massive capital flight erased the funds’ net inflows for 2026, leaving them with roughly $45 million in net outflows for the year to date and highlighting a dramatic shift in investor sentiment toward alternative layer-one assets amid the wider market correction.
