Risk Managers Could Turn Bitcoin ETF Rally into Sell-Off
10x Research CEO Markus Thielen warns that risk managers could flip the current institutional Bitcoin rally into a downturn as market fatigue and spot ETF fund outflows erode risk appetite. He notes that strong institutional buying has driven Bitcoin higher in 2024, especially via spot Bitcoin ETFs, but mounting macro risks and last October’s massive liquidations suggest potential for larger pullbacks. With US spot BTC ETFs recording $939 million in weekly outflows according to CoinShares, Thielen expects portfolio rebalancing could trigger accelerated selling and “risk managers” may demand position cuts. Although Bitcoin remains the preferred asset for institutional crypto exposure, 10x Research suggests shorting Ethereum offers a more efficient hedge. Recent whale profit-taking above $100,000 has contributed to Bitcoin’s underperformance relative to gold and equities since January. Traders should monitor ETF flows, whale activity and macro indicators for early signs of reversal and adjust risk management strategies accordingly.
Bearish
This analysis is categorized as bearish because it highlights growing spot Bitcoin ETF outflows ($939 million last week) and mounting market fatigue that can trigger portfolio rebalancing and forced selling by institutional risk managers. Historical precedents—such as the October 2023 liquidations—demonstrate how swift outflows and macro risk repricing can accelerate downturns. The warning from 10x Research’s Markus Thielen, combined with whale profit-taking above $100,000, suggests near-term selling pressure. In the short term, traders may see increased volatility around ETF flow reports and macroeconomic data releases. Over the longer term, sustained outflows and risk-off sentiment could delay Bitcoin’s next leg up, even though the cryptocurrency remains a core institutional asset. Monitoring ETF metrics and rebalancing actions will be critical for assessing downside risks.