Bitcoin ETF Outflows Surge as JPMorgan Projects 10% Annual Returns

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On November 5, U.S. spot Bitcoin and Ethereum ETFs faced significant withdrawals, with net outflows totaling $530.1 million. This financial setback comes as a reversal after a brief period of inflows, particularly affecting Bitcoin funds. Amidst this market turbulence, JPMorgan has forecasted a 10% annualized return for Bitcoin over the next decade, eclipsing expected returns from major U.S. equities and gold.

Leading Fund Exodus: Fidelity and BlackRock Hit Hard

Data from Farside and SoSoValue indicate that 12 spot Bitcoin ETFs in the U.S. reported a combined net outflow of $430.2 million on November 5. In stark contrast to the previous session’s modest gains, all funds recorded net withdrawals, while Ethereum ETFs experienced a $99.9 million drain.

The largest outflow in Bitcoin ETFs was attributed to Fidelity’s FBTC fund, which saw $199.87 million withdrawn. BlackRock’s IBIT fund followed, with redemptions totaling $104.97 million. Collectively, both funds accounted for a $304.84 million outflow, leaving FBTC with an accumulated net inflow of $10.223 billion and IBIT at $65.504 billion since their inception.

Other substantial withdrawals included $49.90 million from Grayscale’s GBTC, $32.92 million from Franklin Templeton’s EZBC, $23.64 million from VanEck’s HODL, and $18.90 million from Ark Invest and 21Shares’ ARKB. No net flow was recorded in the remaining six funds, including Grayscale Bitcoin Mini Trust, Bitwise BITB, and Morgan Stanley MSBT.

At the time of reporting by SoSoValue, the total net asset value of spot Bitcoin ETFs stood at $96.647 billion, representing 6.31% of Bitcoin’s total market capitalization and aggregated net inflows of $56.111 billion since inception.

JPMorgan’s Long-term Outlook for Bitcoin

Despite the short-term volatility observed in ETF outflows, JPMorgan remains optimistic about Bitcoin’s future financial performance. In its “2027 Long-Term Capital Market Assumptions” report released on November 4, the bank projected Bitcoin’s prospective returns, volatility, and correlation with other asset classes.

JPMorgan anticipates that Bitcoin will achieve a compound annual growth rate of 10% over the next decade, while expecting its annual volatility to stabilize around 55%.

Earlier projections by the bank had estimated annual returns of 7.5% for large-cap U.S. equities, 9.8% for private equity, and 5.5% for gold. A balanced portfolio of 60% equities and 40% bonds was estimated to achieve a 7% yearly return.

Grayscale Highlights Diversification Opportunities

According to Zach Pandl, Head of Research at Grayscale, Bitcoin’s correlation coefficient with large-cap U.S. equities stands at 0.33. Pandl posits that this weaker linkage compared to international stocks, corporate bonds, and hedge funds presents Bitcoin as a viable asset for portfolio diversification.

Pandl emphasized that the projected 10% annualized return for Bitcoin surpasses forecasts for all other major asset classes and noted the rarity of investment options that combine high return potential with low correlation to core equity holdings.