By After a year of record-breaking success, BlackRock Inc.’s iShares Bitcoin Trust ETF (IBIT) experienced a significant shift as investors withdrew a net $333 million on Thursday.
This marks the largest single-day outflow from the fund since its launch and the third consecutive day of net withdrawals—the longest losing streak for this high-profile investment vehicle.
This development signals that the Bitcoin frenzy of 2024 might be taking a pause as the market re-evaluates.
From record inflows to record outflows
IBIT, the largest spot Bitcoin fund, has amassed over $53 billion in assets and nearly $37 billion in inflows since its January launch.
The fund’s popularity, particularly among institutional investors, played a pivotal role in driving the price of Bitcoin to an all-time high of $108,315 in mid-December.
However, this recent tapering of flows into IBIT is just one indicator that Bitcoin’s historic rally in 2024 is experiencing a cooling-off period.
Collectively, the group of a dozen Bitcoin exchange-traded funds in the US have seen a net outflow of roughly $2 billion since December 19th, according to data compiled by Bloomberg.
Institutional demand wanes
Beyond ETF flows, open interest for Bitcoin futures hosted by Chicago-based CME Group Inc., a key metric reflecting US institutional demand, has also fallen nearly 20% from its peak in December.
This combination of decreased ETF inflows and lower futures activity suggests that institutional interest in Bitcoin may be waning, at least temporarily.
“The outflows and decreased open interest is expected with institutions paring back risk and window dressing for year-end balance sheet adjustments,” Paul Howard, senior director at crypto market maker Wincent, told Bloomberg.
Bitcoin price retreats from record high
BlackRock did not immediately respond to a request for comment from Bloomberg News. As of 6:03 a.m. on Friday in New York, Bitcoin was trading at $96,465, approximately 11% below its all-time high.
This price retreat, coupled with the ETF outflows and decreased futures activity, underscores a shift in investor sentiment towards Bitcoin, suggesting a period of consolidation or even a correction after the intense rally.
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