BlackRock clients dump Bitcoin as price hits $81,900. Here’s why analysts say the $3.8bn ETF flush will only get worse

Market Overview - Bitcoin has plunged to $81,900, extending a month-long selloff that has erased over $1.4 trillion from the cryptocurrency markets, with Bitcoin trading more than 30% below its October all-time high [1] - The overall cryptocurrency market capitalization is now under $3 trillion [1] Investor Sentiment - Citrini Research indicates that risk-off sentiment will continue to impact speculative assets like cryptocurrencies until mid-December due to the fallout from the longest US government shutdown in history, which may unleash market volatility [2] - Total liquidations in the cryptocurrency market reached $2 billion in the past 24 hours, indicating increasing investor skittishness [4] Institutional Activity - BlackRock clients led significant outflows, with $355 million withdrawn from the iShares Bitcoin Trust, marking the worst month for ETFs this year since February [5] - Investors pulled $548 million from Bitcoin exchange-traded funds on Thursday, bringing November's total outflows to $3.77 billion [4] Economic Context - Bitcoin's decline below $82,000 coincided with the release of September's jobs report, which showed the US economy added 119,000 jobs, significantly above the expected 51,000, while unemployment rose to 4.4% [6] - The stronger-than-expected job growth has created uncertainty for both dovish and hawkish Federal Reserve representatives as they prepare to discuss interest rates in December [7] Market Dynamics - Analysts suggest that Bitcoin may be decoupling from its historical price movement patterns, leading to potential mispricing of both upside potential and downside risk in the market [2][4] - The current market environment is described as a "toxic cocktail" that is negatively affecting risk appetite across both cryptocurrency and stock markets [2]