Spot Bitcoin and Ethereum Exchange-Traded Funds (ETFs) experienced combined outflows of $672 million on October 30. These massive Bitcoin ETF outflows accounted for $490 million of that total. BlackRock’s IBIT fund was the most affected by the withdrawal. The data, reflecting growing risk aversion, was highlighted by reports from Farside Investors.
The hard data shows cautious sentiment among institutional investors. BlackRock’s IBIT ETF recorded redemptions totaling $290.9 million in a single day. Likewise, its Ethereum product, ETHA, also suffered a notable loss of $118 million. Other large funds managed by Fidelity, Grayscale, and ARK also reported significant outflows.
On the other hand, this capital withdrawal coincides with troubling revelations for BlackRock. According to reports from Bloomberg, the financial giant’s private credit division, HPS Investment Partners, is facing a $500 million fraud scandal. The case involves a telecommunications financing scheme. It is alleged that borrowers used falsified contracts and invoices from large companies like T-Mobile.
This fraud was uncovered just 90 days after BlackRock finalized the acquisition of HPS in July 2025. However, analysts view the ETF outflows more as profit-taking than panic selling. Despite the turbulence, IBIT has attracted $28.1 billion in net inflows so far in 2025, dominating the sector.
Will This Withdrawal Trigger a Massive Short Squeeze?
The exit of institutional money from ETFs creates a risky scenario for leveraged traders. The bearish sentiment could be put to the test. Data from the Whale Insider platform indicates that over $3 billion in Bitcoin short positions would be liquidated if the price recovers to $112,600.
Currently, the price of Bitcoin is trading near $109,287. This means that only a 2.48% rally could trigger this massive liquidation. Such an event would cause a short squeeze, rapidly driving the price higher.
This interplay between institutional redemptions and leveraged bets creates a precarious landscape. Data from Coinglass confirms that many short positions are clustered just above the current price level. A modest rally could drastically change market sentiment, punishing those betting on a deeper decline.
