Bitcoin's Biggest ETF Just Took In $665 MILLION. So Who's Still Selling? | Alex Thorn

Bitcoin ETFs took in $665 million on their biggest inflow day in a month, and all net inflows went to BlackRock’s IBIT as other funds recorded outflows. IBIT also had its largest inflow day of the year. Alex Thorn said the surge likely reflected existing spot Bitcoin holders converting into ETF exposure, not simply a wave of new buyers. Authorized participants collect clients’ indicated demand in advance, so he said the reported inflow probably represented Friday’s interest, when Bitcoin was weak, rather than the stronger price action on Wednesday and Thursday.

Thorn said the conversion trend started before the Coldcard exploit. Wealthy holders may value ETFs for beneficiary and estate transfers or access to borrowing through traditional prime desks; concerns about self-custody may also play a part, but do not explain when the trend began. Conversions can go both ways, though the net flow is currently toward ETFs. Thorn’s flow chart compares ETF and treasury-company activity with movements of Bitcoin dormant for more than five years, which he calls “OG distribution.” This year, more than 100,000 BTC moved on-chain or flowed out of ETFs and treasury companies than those entities acquired. He does not expect the chart’s black dotted line to turn positive this year.

That comparison is a heuristic, not proof that older holders are selling. Coins can move for custody reasons, and a transfer to an exchange does not establish that a sale followed. Thorn said Bitcoin has tended to perform better when ETF and treasury-company inflows exceed movements of older coins. More than half of Bitcoin’s supply is in addresses with no known attribution, so tracking firms observe less than half; those coins may be self-custodied or lost, but they are not all lost. October weakness, the speakers said, also coincided with ETF outflows and weak treasury-company buying. Thorn said companies including Strategy had made no meaningful purchases since May; the discussion put treasury-company holdings near 1 million BTC and Michael Saylor’s holdings near 850,000 BTC.

Despite a choppy year, Thorn put year-to-date net ETF flows at about $355 million positive, with September inflows keeping them above zero. He expects the year to end positive, while cautioning that ETF flows can reflect trading, carry trades, options strategies, or institutional activity rather than broad retail adoption. The speakers described Morgan Stanley’s MSBT as a retail-sentiment gauge: it had not recorded outflows, but sometimes went two or three days without inflows, which they took as evidence of limited retail demand so far. Banks and brokerages are adding Bitcoin products in response to client and adviser interest, and may prefer clients to use their own offerings. Morgan Stanley’s ETF charges 14 basis points; BlackRock has announced a third Bitcoin product, and its IBIT options product dominates Bitcoin options.

Thorn said Bitcoin’s drawdown bottomed around 53% in June and linked shallower drawdowns and lower volatility to market maturation, Bitcoin’s greater size, investor demographics, and dealer and options activity. Bitcoin subsequently moved above the $60,000 range, made a higher high, and reclaimed its 50-week moving average. Thorn was fairly confident the bottom was in, but allowed for more sideways trading and said a global AI-trade meltdown could invalidate his outlook. He attributed the rebound mainly to true believers and longer-term investors, with major macro traders not yet broadly involved. If prices rise enough to bring traditional investors back, he expects Bitcoin’s sensitivity to macro conditions to increase.

The discussion also pointed to changing financial infrastructure and investor access. Thorn said ETF lending rates could approach those offered by crypto-native lenders, while another speaker expected bank and brokerage lending to become substantial competition within 12 to 24 months. JPMorgan research projected 10% annual Bitcoin returns over the next decade, its first return estimate for Bitcoin, while remaining cautious about the asset’s portfolio role; another speaker thought 10% might understate Bitcoin’s potential. On tokenization, Thorn said issuer opt-outs from third-party listings do not necessarily signal opposition to tokenization, and that issuer-sponsored tokenization is permitted under the innovation exemption. He remained uncertain whether its restrictions can support an onshore market competitive with offshore venues.