Bitcoin’s incredible rally in 2024 paused as
institutional investors reduced their positions. BlackRock’s iShares Bitcoin
Trust ETF (IBIT), a spot Bitcoin fund, reported its biggest single-day outflow
since its launch, with $333 million withdrawn yesterday (Thursday), according
to Bloomberg data.
Third Consecutive Day of Outflows
The withdrawal marked the third straight day of
outflows for the fund, highlighting a shift in sentiment. IBIT, which launched
in January, had become popular among institutional investors, a factor that
pushed Bitcoin to a record high of $108,315 in mid-December.
However, by year-end, the once unstoppable fund began
to lose momentum. The decline in IBIT’s inflows reflects a broader trend across
the cryptocurrency sector.
[BREAKING] #BlackRock’s iShares Bitcoin Trust (IBIT) saw a record outflow 🔴$332.6M (-3,413 BTC) on the first trading day of 2025!This surpassed the ETF’s previous low of $188.7M (-1,933 BTC) on December 24, 2024.In 2024, BlackRock saw cumulative inflows of $37.2B for its… pic.twitter.com/CGQhI3niKb
— Spot On Chain (@spotonchain) January 3, 2025
Since December 19, Bitcoin-focused exchange-traded
funds in the U.S. have reportedly recorded net outflows of approximately $2
billion. Additionally, open interest in Bitcoin futures on the Chicago-based
CME Group fell nearly 20% from its December peak.
This decline in outstanding contracts, often used to
gauge institutional demand, represents a shift in market dynamics as investors
reassess their risk exposure.
Year-End Portfolio Adjustments
Market analysts attribute the outflows to year-end
portfolio adjustments by institutional investors. These adjustments come as
Bitcoin trades nearly 11% below its December high, at $96,423 today (Friday).
While significant, the pullback is not unusual
following a year of explosive gains for the cryptocurrency. Despite the record
outflows, BlackRock has reportedly not issued a statement regarding the trend. Bitcoin’s retreat, coupled with reduced institutional
activity, suggests the digital asset’s meteoric rise in 2024 may face a more
measured pace in the months ahead.
BlackRock’s #Bitcoin ETF, $IBIT, is now worth nearly double BlackRock’s gold ETF, $IAU. which was launched in 2005 👀 pic.twitter.com/jAiCKmPsN7
— Bitcoin News (@BitcoinNewsCom) December 17, 2024
IBIT was launched last year following the approval of spot
Bitcoin ETFs in the US. The fund took the lead at its commencement, taking the
lead at pre-market trading. Securities and Exchange Commission’s (SEC) approval of the applications from major
companies such as BlackRock, Grayscale, and others paved the way for 11 spot Bitcoin ETFs to be listed
and traded on public exchanges.
Last month, US-based spot Bitcoin ETFs collectively recorded outflows totaling $338.4 million. Since December 19, these funds have reportedly experienced net outflows of $1.52 billion. Interestingly, US Bitcoin ETFs surpassed gold ETFs in assets under management for the first time, reaching $129 billion.
This article was written by Jared Kirui at www.financemagnates.com.
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