Major cryptocurrency exchange-traded funds (ETFs) for Bitcoin and Ethereum experienced significant outflows on October 30, amounting to a combined $672 million. BlackRock’s IBIT ETF was the biggest contributor to these losses, shedding $291 million. In addition, the Ethereum-focused ETHA ETF saw outflows totaling $118 million. The heavy outflow from institutional clients signals a palpable concern regarding risk management amid growing macroeconomic uncertainties.
According to data from Farside Investors, institutional investors withdrew $490 million from Bitcoin ETFs on the same day, with BlackRock’s IBIT leading the trend. Other notable players in the space—such as Fidelity, Bitwise, ARK, Invesco, VanEck, and Grayscale—also reported substantial redemptions. In total, Bitcoin ETFs faced outflows of $488.4 million, while Ethereum ETFs experienced $184 million in losses.
Investment analysts suggest that these withdrawals are more indicative of profit-taking and portfolio adjustments rather than outright panic selling. This caution in risk exposure comes at a time when scrutiny of BlackRock has intensified due to a reported fraud scandal affecting its private credit division.
Recent revelations disclosed that BlackRock’s private-credit arm, HPS Investment Partners, lost over $500 million due to a fraud scheme linked to its telecom financing activities. Allegations in court filings assert that borrowers, including Broadband Telecom and Bridgevoice, used forged documentation from major firms like T-Mobile and Telstra to secure substantial loans. This case has sparked further interest in the ethical and operational diligence exercised by BlackRock, particularly following the firm’s acquisition of HPS earlier this year for $12 billion.
The scandal, which came to light in August 2025, revealed systemic forgery that led to bankruptcies and lawsuits, causing anxiety among investors regarding the robust oversight of BlackRock’s credit processes. As scrutiny mounts, questions surrounding the company’s risk management practices persist.
Despite these challenges, BlackRock remains a dominant player in the ETF space. Recent analysis shows that the IBIT ETF accumulated $28.1 billion in net inflows since the beginning of 2025, significantly surpassing that of its competitors combined. Excluding IBIT from the broader sector would have resulted in a collective net outflow of $1.2 billion this year, raising alarms about potential systemic vulnerabilities if BlackRock were to face significant redemptions.
Meanwhile, leveraged traders in the cryptocurrency space grapple with heightened risk as institutional funds exit Bitcoin ETFs. Reports indicate that short positions totaling over $3 billion could be liquidated if Bitcoin’s price climbs to $112,600, just 2.48% above its current trading level of approximately $109,287. A modest rally could initiate a series of short liquidations, catalyzing rapid market shifts.
The unfolding situation emphasizes the delicate interplay between institutional moves and market dynamics, suggesting that any sudden changes in sentiment or price could lead to increased volatility in the near future.
