Bitcoin’s Pursuit of Digital Gold Status Faces 2025 Test as ETF Withdrawals and Market Swings Escalate
In November, investors withdrew a record-setting $3.1 billion from 12 U.S. spot
Bitcoin
exchange-traded funds (ETFs), with
BlackRock's flagship iShares Bitcoin Trust
(IBIT) experiencing a $523 million outflow on November 19—the largest single-day withdrawal since its debut in January 2024. After reaching a seven-month peak of $126,000 in October, Bitcoin has since dropped below $90,000,
resulting in a 29% decline from its high
and wiping out $1.1 trillion in market value. The downturn has intensified as
technical signals point to growing bearish trends
for Bitcoin and other cryptocurrencies like
Ethereum
and
XRP
.
Amid this upheaval, Abu Dhabi’s Mubadala Investment Co. has increased its Bitcoin holdings threefold in recent months, signaling the emirate’s ambition to become a leading crypto center. The $330 billion sovereign wealth fund, through its MGX arm, also invested $2 billion in Binance using a Trump-associated stablecoin.
Mubadala’s affiliated fund has brought on prominent executives
to grow its private equity and digital asset portfolios. These actions demonstrate that major institutions and governments are still investing in crypto despite ongoing volatility, even as U.S. ETFs see significant outflows.
The wave of ETF withdrawals highlights a shift in investor attitudes.
BlackRock's IBIT has dropped 19% in value so far this quarter
, while the overall ETF sector is heading for its weakest month since February 2025.
Experts attribute the outflows
to profit-taking by long-term investors, tighter financial conditions, and diminished speculative interest. At the same time,
Bitcoin’s connection to gold has grown weaker
, as India’s foreign reserves climbed $5.54 billion to $692.576 billion, including a $5.3 billion boost in gold assets.
Regulatory and structural issues add further complexity to Bitcoin’s “digital gold” story.
The absence of consistent global regulations
hinders institutional participation, while security concerns and price swings deter more cautious investors. Still, new legislation could change the landscape.
Rep. Warren Davidson’s Bitcoin for America Act
proposes allowing taxpayers to pay the IRS in Bitcoin, directing those funds into a Strategic Bitcoin Reserve. Supporters claim this could generate up to $14 trillion in total value if just 1% of federal taxes are paid in crypto over twenty years.
Despite the current instability, some organizations are adjusting.
HashStaking has improved transparency
protocols as Bitcoin trades near $81,000, while
Bitget has teamed up with Ampersan
to boost institutional liquidity in the U.S. Exchange (UEX) era. These initiatives reflect a broader movement to bring greater stability and professionalism to the crypto market, even as participants prepare for continued turbulence.
