What an ETF 'outflow' actually means, in plain words
Plainblocks ·
US spot Bitcoin ETFs had $635 million of net outflows on 22 October, the biggest day since 25 June. That sounds like a lot of people selling. It mostly means more ETF shares were redeemed than created that day.
When shares are redeemed, the trust hands Bitcoin or cash to the authorised participant (the firm allowed to create and redeem ETF shares). So the coins do leave the fund. What the daily number does not tell you is who sold on an exchange, or why. One red day is also not a month: October is about $175 million net negative, while the latest week still brought in $443 million.
A coat check is the closest thing I can think of: more tickets handed back than given out means more coats left the cloakroom, and it tells you nothing about who sold a coat outside. What I still find confusing is why the one red day gets a headline and the week's inflow does not.
When shares are redeemed, the trust hands Bitcoin or cash to the authorised participant (the firm allowed to create and redeem ETF shares). So the coins do leave the fund. What the daily number does not tell you is who sold on an exchange, or why. One red day is also not a month: October is about $175 million net negative, while the latest week still brought in $443 million.
A coat check is the closest thing I can think of: more tickets handed back than given out means more coats left the cloakroom, and it tells you nothing about who sold a coat outside. What I still find confusing is why the one red day gets a headline and the week's inflow does not.