October 31, 2026
Bonus Content: Bitcoin Fell to $77K. The ETF Outflow Tells You Why.
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A termite inspection. A mosquito treatment for the yard. A can of bug spray under the sink.
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When the public turns on a product, people usually stop buying it. But some things can’t be quit.
Termites still eat houses.
Rodents still get into food plants.
Crops still need protecting.
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Our new investor letter follows where it could go, and introduces a small company that has spent years building botanical products for exactly that shift.
Where does that money go next? →
P.S. The letter also covers what most stories skip: the counterarguments. You may not agree with the conclusion. Read it and decide →
Bitcoin Fell to $77K. The ETF Outflow Tells You Why.
Bitcoin is sitting at roughly $77,300 this morning, and the cleanest way to understand what happened is one number: $643 million. That is the net outflow from US spot bitcoin ETFs on Friday alone, based on SoSoValue data. One session erased more than the entire four-day inflow streak that preceded it.
Market Snapshot
Bitcoin is trading at $77,338 as of this morning, with a 24-hour volume of $15.47 billion. That puts BTC roughly 39% below its all-time high of $126,210, reached on October 6, 2025. The backdrop in equities made a bad day worse. The Nasdaq Composite fell 2.86% on October 30, closing at 25,437, its largest one-day decline since June.
Stocks in Focus
BlackRock’s IBIT led Friday’s exodus at $233.70 million in outflows, with Fidelity’s FBTC next at $201.04 million. Together the two funds accounted for roughly 68% of the total net outflow.
The equity proxies took the full force of the move. Coinbase closed at $143.54, down 10.62% on the session. Strategy (MSTR) was no better: shares closed at $130.51, down $11.11, or 7.84%, with a session low of $124.10. MSTR’s 52-week range now stretches from $81.81 to $276.32, a spread that captures exactly how levered this stock is to bitcoin sentiment.
Sector Watch
Crypto-linked equities amplified every downward tick in BTC. The sector saw broad losses: MSTR fell 8.05%, Robinhood dropped 7.94%, and Coinbase declined 7.75%. The Binance incident added a second layer of pressure. The outflows landed one day after Binance reported unauthorized withdrawals of approximately $6.3 billion. Spot ETFs hold physical BTC to back their shares, so $643 million in redemptions requires corresponding sales from fund reserves. That mechanical selling channel is what separates ETF outflow days from ordinary price weakness.
Risk Radar
Ethereum funds extended their losing run to a fifth straight day of outflows, shedding $155.85 million. Relative to pool size, that proportional hit is almost double what bitcoin absorbed. Watch ETH separately: a $156 million outflow takes a proportionally bigger bite out of the Ethereum ETF pool than $643 million takes from the bitcoin side.
The divergence between institutional selling and on-chain accumulation is a recurring tension in bitcoin markets. Corporate treasury buyers have continued accumulating BTC even as ETF outflows and price weakness signal short-term institutional retreat.
The AI spending story that drove both the Nasdaq selloff and crypto’s correlated decline is not resolved. The tech sell-off was driven by worries that the frenzy around AI sent prices too high. Until that fear dissipates or earnings dispel it, any bitcoin bounce that looks like a recovery could get sold into by the same traders who treat BTC as a leveraged expression of the AI trade.
The Cheat Sheet
- Top Market Theme: Bitcoin and crypto equities are trading as a high-beta AI proxy, selling off in lockstep with Nasdaq tech on the same fear that AI capex won’t pay back.
- Stock to Watch: COIN. Down 10.62% Friday, down 26% for October, and reporting Q3 transaction revenue that fell 44% year over year. The level to watch is the 52-week low at $136.89.
- Sector to Watch: Crypto-linked equities. MSTR, COIN, and HOOD all moved in the same direction with outsized magnitude. They will lead any recovery just as quickly as they led the decline.
- Biggest Risk: The Binance withdrawal pause. A security incident at Binance was tied to unauthorized withdrawals of about $6.3 billion, and the exchange temporarily suspended deposits and withdrawals while it conducts checks. If confidence in the pause wavers, a second wave of ETF redemptions is possible.
- Biggest Opportunity: IBIT and FBTC at current bitcoin prices, if you believe the Binance incident is contained and the Nasdaq AI selloff is near exhaustion. Total net assets across US spot bitcoin ETFs stand at $98.14 billion, with cumulative net inflows still positive.
- One Thing to Remember: Friday’s $643 million outflow was the largest since June, but it followed four consecutive days of inflows. The structure of demand has not collapsed; it paused. Distinguish between a structural reversal and a single-session risk-off flush before acting on either side.
