The recent drop in Bitcoin’s price appears to be closely linked to movements in Bitcoin and Ethereum exchange-traded funds (ETFs) managed by major asset managers such as BlackRock and Fidelity. Between November 3 and 7, 2025, these funds experienced a significant outflow of about $2.4 billion, with Bitcoin ETFs alone shedding approximately $1.23 billion. This large-scale redemption coincided with a modest dip in Bitcoin’s price from its late October peak above $110,000 to around $107,200, suggesting that investors were engaging in short-term profit-taking rather than abandoning the asset entirely[1].
The outflows from BlackRock’s and Fidelity’s Bitcoin and Ethereum ETFs were not isolated but part of a broader market reaction influenced by macroeconomic factors. One key driver was the reduced expectation of a Federal Reserve rate cut in December, which lowered risk appetite among investors. As the likelihood of a rate cut fell from over 90% to around 65%, money moved away from riskier assets like cryptocurrencies, prompting redemptions in crypto ETFs. This macro shift, combined with increased volatility following a flash crash, led some traders to trim positions or exit during the bounce, amplifying the outflows from the largest and most liquid funds[2].
The ETF structure itself plays a role in how these flows impact Bitcoin’s price. Authorized participants can create or redeem ETF shares to meet demand, which means that heavy selling leads to redemptions that pull Bitcoin or futures exposure out of the funds. When broad market liquidity is thin, this can exert downward price pressure on Bitcoin. Large-cap funds like those managed by BlackRock and Fidelity tend to move first because they are easier to trade, explaining why the week’s outflows were concentrated in these products[2].
Despite the recent pullback, institutional interest in Bitcoin remains robust. After several days of outflows, US-listed spot Bitcoin ETFs saw a net inflow of $524 million on November 11, led again by BlackRock and Fidelity. This suggests renewed confidence and a potential reversal of the prior trend, indicating that the market is still receptive to Bitcoin as an investment, especially as macroeconomic conditions evolve[4].
Bitcoin’s price movements in 2025 have been heavily influenced by shifts in collateral, funding rates, margin requirements, and ETF flows. The October shakeout, which saw about $19 billion in liquidations, highlighted how ETF hedging and collateral adjustments can drive price volatility. When ETF flows turn positive, they reduce spot inventories and support prices; when they reverse, they add to reserves and push prices lower. This dynamic interplay means that ETF flows, especially from large managers like BlackRock and Fidelity, are a significant factor in Bitcoin’s price fluctuations[5].
Looking ahead, Bitcoin’s price trajectory will likely depend on upcoming macroeconomic data, such as the US Consumer Price Index (CPI) report. A cooler inflation reading could boost ETF inflows and push Bitcoin above key resistance levels like $114,000, while a hotter CPI print might deepen the pullback. The recent resolution of the US government shutdown has eased some systemic risk but has not yet sparked strong ETF inflows, indicating that investors are waiting for clearer economic signals before committing more capital[3].
In summary, the drop in Bitcoin’s price is linked to the large outflows from Bitcoin ETFs managed by BlackRock and Fidelity, driven by short-term profit-taking, macroeconomic shifts, and ETF mechanics. However, institutional interest remains strong, and inflows have resumed, suggesting that these moves are part of normal market fluctuations rather than a fundamental loss of confidence in Bitcoin. The ongoing interaction between ETF flows, macroeconomic factors, and market liquidity will continue to shape Bitcoin’s price in the near term.