Digital asset ETP investors largely shrugged off October’s liquidity cascade, CoinShares finds, even as on-chain markets and derivatives traders reacted with fury. Last week saw US$513 million in net outflows from exchange-traded products (ETPs) after the October 10th sell-off.
When combined with the immediate redemptions that followed the cascade, net ETP outflows now total roughly US$668 million, a clear, if muted, institutional response to one of the messiest episodes of 2025. ETP volumes remained elevated at about US$51 billion for the week, nearly double this year’s weekly average, showing that investors continued to trade aggressively even as some stepped back.
The flows were strikingly regional. The United States accounted for almost all of the withdrawals, with US-focused products seeing roughly US$621 million in outflows. By contrast, Europe and Canada looked at the price wobble as a buying opportunity: German, Swiss and Canadian ETPs recorded inflows of about US$54.2 million, US$48.0 million and US$42.4 million, respectively.
That cross-border divergence suggests that while U.S. investors were trimming risk, perhaps through ETF redemptions and tactical de-risking, buyers in other jurisdictions were treating the dip as an entry window. At the asset level, the split was even more pronounced. Bitcoin led the retreat, with nearly US$946 million of outflows last week; year-to-date inflows for BTC products still sit at US$29.3 billion but lag 2024’s pace.
Meanwhile, traders rotated into other parts of the market: Ethereum saw US$205 million of inflows as buyers “picked up the dip,” and one 2x leveraged Ethereum ETP alone attracted US$457 million in net subscriptions, a sign that some market participants remain aggressively bullish on ETH’s near-term upside. Solana and XRP also benefited from ETF-launch enthusiasm, drawing US$156 million and US$73.9 million, respectively.
Recovering from the Chaotic Event
Those institutional numbers sit alongside a much broader market story: the October 10–11 cascade wiped out roughly US$19 billion in leveraged positions in a single, violent liquidation event that sent prices tumbling across the board. The flash event has been tied to macro headlines, notably sudden tariff rhetoric and broader fears about tightening liquidity, which amplified stress in margin-heavy parts of the market and forced automated liquidations on major exchanges.
Reports and exchange posts place the scale of the wipeout at about US$19–20 billion, and firms from hedge funds to retail traders described the night as chaotic. Exchanges moved quickly to contain the fallout. Binance rolled out a recovery plan and compensation measures to help users who were liquidated during the turmoil, while other platforms emphasized extra liquidity and funding to shore up institutional counterparties.
Those actions helped calm parts of the market, but they did little to erase the underlying questions about leverage, cross-margining and systemic liquidity risk that the episode exposed. Price action this morning showed a market in itch-and-healing mode. Bitcoin was trading a little above US$110,800 and Ethereum around the US$4,000 mark after a bounce from deeper October lows; both have retraced some losses but remain under the shadow of the sell-off.
Short-term technicals point to a tight, choppy range: technical analysts flagged support zones near US$107k for Bitcoin and around US$3,900 for Ethereum, with resistance clustered near the recent highs in the low six figures and near US$4,200 for ETH. Traders are watching ETF flows closely, since big daily redemptions, such as those recorded by Bitcoin spot ETFs in mid-October, can exacerbate price weakness even in a broadly liquid market.
Looking for the Silver Lining Ahead
Looking ahead, the ETF story remains a central theme. Optimism around spot products tied to Solana and XRP has been a clear driver of inflows into those token ETPs. Banks and brokerage research note that spot Solana funds, if approved, could see modest first-year flows compared with Ethereum and Bitcoin.
At the same time, a successful XRP ETF approval would likely unlock significant institutional demand, though regulatory filings and procedural delays mean timetables are still uncertain. The combination of new product launches and continued institutional interest is helping to push rotation out of pure bitcoin exposure and into other parts of the market.
For investors and portfolio managers, the takeaway is mixed: on one hand, the ETP market showed resilience, subscribers rebalanced quickly and volumes spiked, which limited a broader hit to paper losses for long-term holders. On the other hand, the record liquidation event exposed lingering structural fragilities: high leverage, coupled with headline-driven macro shocks, can still cascade through derivatives, exchanges and spot markets in the space of hours.
Until leverage profiles and liquidity buffers normalize, these episodic bouts of volatility will likely keep fund flows and price action tightly coupled. Traders will be watching two things: whether ETF redemptions stabilize or persist, and whether on-chain metrics return to calmer levels. If flows recalibrate and confidence returns, the market’s quick bounce in volume and selective inflows suggest institutional investors may continue to buy the dips; if redemptions accelerate, however, the sell-off’s aftershocks could extend into the rest of the quarter.
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