Investors Yank $333 Million from BlackRock’s iShares Bitcoin Trust ETF
Record-Breaking Fund Suffers Largest Withdrawal Since Launch
Investors pulled a net $333 million from BlackRock’s iShares Bitcoin Trust ETF (IBIT) on January 2, its largest withdrawal since its launch. This marks the third consecutive day of outflows for the fund, according to data compiled by Bloomberg.
Longest Losing Streak
The IBIT, the largest spot Bitcoin fund with over $53 billion in assets and nearly $37 billion in inflows, was a major hit with institutional investors after its January launch. It helped push the largest digital asset to an all-time high of $108,315 in mid-December.
Tapering of Flows
The tapering of flows to IBIT is another sign of Bitcoin’s record-breaking run in 2024 taking a breather. The group of a dozen Bitcoin exchange-traded funds in the US have posted a net outflow of about $2 billion since December 19, according to Bloomberg data.
Open Interest Falls
Open interest – or outstanding contracts – for Bitcoin futures hosted by the Chicago-based CME Group, seen as a measure of US institutional demand, also fell nearly 20% from its December peak.
Experts Weigh In
"The outflows and decreased open interest is expected with institutions paring back risk and window dressing for year-end balance sheet adjustments," said Paul Howard, senior director at crypto market maker Wincent.
BlackRock’s Response
BlackRock did not immediately respond to a request for comment from Bloomberg News.
Current Market Price
Bitcoin was trading at $96,465 at 6:03 am on Friday in New York, about 11% below its record high.
Conclusion
The recent outflows from the iShares Bitcoin Trust ETF (IBIT) are a sign that the record-breaking run of Bitcoin in 2024 may be taking a breather. As institutions adjust their portfolios and reduce risk, it is likely that we will see a decrease in the demand for Bitcoin and other digital assets.
FAQs
Q: What is the iShares Bitcoin Trust ETF (IBIT)?
A: The iShares Bitcoin Trust ETF is the largest spot Bitcoin fund with over $53 billion in assets and nearly $37 billion in inflows.
Q: Why are investors pulling money out of the iShares Bitcoin Trust ETF (IBIT)?
A: Investors are pulling money out of the fund due to a decrease in demand for Bitcoin and other digital assets, likely as institutions adjust their portfolios and reduce risk.
Q: What is open interest?
A: Open interest refers to the number of outstanding contracts for a particular asset, such as Bitcoin, and is often used as a measure of demand.
Q: What is the current market price of Bitcoin?
A: The current market price of Bitcoin is $96,465, about 11% below its record high.
