Bitcoin ETFs Record Massive Outflows Despite Modest Price Recovery – Texas Purchases $5 Million

Bitcoin Shows Resilience Amid Sustained ETF Outflows

Bitcoin price has demonstrated resilience despite massive outflows from exchange-traded funds. The cryptocurrency is currently trading around $83,000 USD, marking a recovery of seven to eight percent from the weekly low of $81,600 USD on November 21 ^[1].

However, this price development contrasts sharply with dramatic capital outflows from US Bitcoin spot ETFs. Cumulative net outflows have reached nearly $3.6 billion USD, approaching a historic record ^[1].

BlackRock ETF Bears Brunt of Outflows

Particularly notable is the development of BlackRock's Bitcoin ETF IBIT, which recorded redemptions of $2.2 billion USD in November alone. This makes the world's largest asset manager responsible for approximately 63 percent of all Bitcoin ETF outflows ^[1].

According to analysts, market dynamics are significantly shaped by macroeconomic uncertainty. Conflicting signals from the US Federal Reserve are driving sustained selling pressure, despite Fed Governor Christopher Waller's support for a rate cut in December ^[1].

Texas Enters Market with Strategic Bitcoin Investment

Bucking the institutional outflow trend, the Texas government is sending a clear signal for Bitcoin. The US state acquired $5 million USD worth of shares in BlackRock's IBIT ETF on November 20 ^[2]. Lee Bratcher, president of the Texas Blockchain Council, confirmed the transaction via the platform X.

Overall, $10 million USD from general budget funds have been allocated for Bitcoin investments ^[2]. The Texas government plans long-term Bitcoin self-custody but is initially using the ETF route while finalizing processes for direct custody ^[2].

Groundbreaking Development for State Bitcoin Adoption

Pierre Rochard, CEO of The Bitcoin Bond Company, sees Texas's decision as a significant shift: "Five years ago we went from 'governments will ban Bitcoin' to 'governments are only buying small amounts of Bitcoin.' The hyperbitcoinization has happened, is happening, and will continue to happen" ^[2].

Governor Gregg Abbott established the legal foundation for the purchase in June when he officially approved the creation of a state-managed fund to hold Bitcoin as a long-term financial asset ^[2]. According to the original legislation, only assets with a market capitalization exceeding $500 billion USD are eligible for the reserve – a threshold Bitcoin meets ^[2].

Wisconsin as Trailblazer

Texas is not, however, the first US state to invest in BlackRock's Bitcoin ETF. Wisconsin had already acquired nearly $100 million USD worth of shares in May 2024 ^[2].

The situation is considerably weaker for Ethereum. The second-largest cryptocurrency is trading between $2,900 and $2,940 USD, which, while above the previous week's lows, remains significantly weaker than Bitcoin due to substantial institutional outflows and a monthly decline exceeding 25 percent ^[1].