$3 billion BTC short positions are in jeopardy! Bitcoin ETF saw a single-day outflow of $490 million, and BlackRock is embroiled in a $500 million fraud scandal.

On October 30, Thursday, Bitcoin ETF faced large-scale redemptions from institutional investors, with a total outflow of $490 million in a single day, while Ethereum ETF also saw an outflow of $184 million, reflecting a risk-averse sentiment amid macro uncertainty. Meanwhile, BlackRock's private credit division HPS was embroiled in a telecom financing fraud scandal amounting to up to $500 million, exacerbating market concerns. However, whale data shows that $3 billion in Bitcoin short positions are in jeopardy, as a rebound above $112,600 could trigger rapid liquidations.

Institutional Retreat: ETF Net Outflow Exceeds $670 Million in a Single Day, BlackRock's IBIT Leads the Decline

Large-scale ETF redemptions indicate that institutional clients are reducing risk exposure, which coincides with the rising concerns in the market regarding BlackRock.

• Massive Outflow: Bitcoin and Ethereum ETF had a total outflow of $672 million on October 30. Among them, Bitcoin ETF saw an outflow of $490 million.
• Leading Sheep IBIT Hit Hard: BlackRock's IBIT ETF saw net redemptions of $290.9 million, leading the outflow rankings. In terms of Ethereum ETF, BlackRock's ETHA also experienced an outflow of $118 million.
• Risk Aversion Signal: Analysts believe that these large-scale withdrawals are institutional investors taking profits and adjusting their portfolios in the face of increased macro uncertainty, rather than panic selling. However, the timing of the outflows coincides with a major scandal involving BlackRock, which undoubtedly exacerbates investor anxiety.
• Concentrated Risk Hazards: Despite the turbulence, IBIT has attracted $28.1 billion in net inflows since early 2025, surpassing the total of all competitors. This high concentration has raised concerns about systemic risk, as further forced reductions by BlackRock could lead to liquidity outflows in the entire crypto ETF market.

Fraud Scandal: BlackRock's Private Credit Unit HPS Explodes with 500 Million Dollars

The dilemma faced by BlackRock is not just the ETF outflows; a fraud scandal related to its private credit division is also shaking the institutional market.

• HPS suffers heavy losses: According to Bloomberg, BlackRock's private credit division HPS Investment Partners lost over $500 million in a telecom financing scheme involving fake receivables.
• Systemic Fraud: Documents from the New York Supreme Court allege that borrowers Broadband Telecom and Bridgevoice used forged contracts and invoices from companies such as T-Mobile and Telstra as collateral for loans.
• Timing Sensitive: This scandal was discovered just 90 days after BlackRock acquired HPS for $12 billion, raising serious questions about the company's due diligence and risk oversight.

Market Outlook: $3 billion in short positions hanging in the air, intense long and short battle.

Although institutional outflows signal bearish trends, the leverage bets in the derivatives market provide the possibility of a quick rebound.

• Short Positions Liquidation Risk: On-chain data shows that once the Bitcoin price reaches $112,600, there will be over $3 billion in Bitcoin short positions at risk of liquidation.
• Only 2.48% to Liquidation: The current Bitcoin trading price is about $109,287, which is only 2.48% away from this liquidation threshold. Even a moderate Rebound could trigger a short positions squeeze, leading to a rapid price reversal.
• Complex Long and Short Sentiment: Coinglass liquidation data shows that many short positions are concentrated above the current price. The interaction between this institutional redemption and leveraged shorting creates an unstable market environment, and sentiment may rapidly reverse.

Conclusion

The large-scale outflow of funds from the Bitcoin ETF, combined with BlackRock's fraud scandal, undoubtedly casts a shadow over short-term market sentiment, highlighting the institutions' risk aversion under macroeconomic uncertainty. However, the $3 billion in short positions hanging in the derivatives market provides a technical possibility for a rapid rebound in prices. Investors need to closely monitor the key liquidation level of $112,600 to assess the final outcome of the bull-bear battle in the short term.