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After a year of record-breaking success, BlackRock Inc.’s iShares Bitcoin Trust ETF (IBIT) experienced a significant turnaround as investors pulled out a net $333 million on Thursday.
This marked the largest single-day outflow and the third consecutive day of net withdrawals from the fund since its launch – the longest losing streak for this high-profile investment vehicle.
This development signals that the Bitcoin mania of 2024 may be coming to a halt due to market revaluation.
From record inflows to record outflows
IBIT, the largest spot Bitcoin fund, has garnered more than $53 billion in assets and nearly $37 billion in inflows since its launch in January.
The popularity of the fund, especially among institutional investors, played a key role in driving the price of Bitcoin to an all-time high of $108,315 in mid-December.
However, the recent decrease in inflows into IBIT is just an indicator that Bitcoin’s historic rally in 2024 is experiencing a cooling period.
Collectively, a group of a dozen Bitcoin exchange-traded funds in the U.S. have seen net outflows of nearly $2 billion since Dec. 19, according to data compiled by Bloomberg.
institutional demand has decreased
Beyond ETF flows, open interest for bitcoin futures hosted by Chicago-based CME Group Inc., a key metric reflecting U.S. institutional demand, has also fallen nearly 20% from its peak in December.
This combination of decreased ETF inflows and less futures activity suggests that institutional interest in Bitcoin may be waning, at least temporarily.
“Institutions are expected to reduce risk for year-end balance sheet adjustments and window dressing with outflows and lower open interest,” Paul Howard, senior director at crypto market maker Vincent, told Bloomberg.
Bitcoin price retreats from record high
BlackRock did not immediately respond to Bloomberg News’ request for comment. As of 6:03 a.m. Friday in New York, Bitcoin was trading at $96,465, about 11% below its all-time high.
This decline in value, coupled with ETF outflows and reduced futures activity, underscores a change in investor sentiment towards Bitcoin, suggesting a period of consolidation or even a correction after a sharp rally.
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