BlackRock’s iShares Bitcoin Trust (IBIT) recorded its largest single-day outflow since launch, as investors withdrew $523 million on Tuesday, a sharp signal of deteriorating sentiment in an already fragile crypto market.
Key Takeaways:
- BlackRock’s IBIT saw a record $523 million single-day outflow, signaling weakening confidence across the crypto market.
- Bitcoin has fallen nearly 30% from its October peak, pushing US spot ETF investors into the red.
- Tightening liquidity and macro uncertainty are prompting traders to hedge aggressively against further downside.
The outflow marked the fund’s fifth consecutive day of redemptions, according to data from SoSoValue.
Bitcoin Sinks 30% From Peak as ETF Investors Slip Into the Red
Bitcoin has now fallen nearly 30% from its October all-time high, dropping to its weakest level since April.
The decline follows the Oct. 10 liquidation event that erased roughly $19 billion in leveraged positions, a shock that the market has yet to recover from.
On Tuesday, Bitcoin broke below a key threshold that pushed investors in the 12 US spot Bitcoin ETFs collectively into the red, further accelerating outflows.
More than $3 billion has been pulled from the group so far this month, nearly $2 billion of which came from IBIT alone. BlackRock did not respond to a request for comment.
The retreat is notable given IBIT’s breakout performance since making its debut in January 2024.
The fund has gathered more than $72 billion in assets and attracted around $26 billion of inflows this year, becoming the dominant spot Bitcoin ETF in the US market.
However, the recent wave of redemptions has fueled concerns that institutional appetite is cooling as macro uncertainty grows.
“ETF outflows combined with long-term holder sales have tightened market liquidity, pushing short-term Bitcoin prices lower and highlighting weakening market confidence,” Dilin Wu, research strategist at Pepperstone, told Bloomberg.
Options traders are also positioning defensively. Sean Dawson, head of research at Derive.xyz, said a growing number of market participants are buying protection against Bitcoin falling to $80,000 by late December.
“With ongoing concerns about the resilience of the U.S. job market and the probability of a December rate cut slipping to barely above a coin toss, there’s very little in the macro backdrop giving traders a reason to stay bullish into the close of the year,” he noted.
Digital Asset Products See $2B Outflows
As reported, digital asset investment products suffered their heaviest weekly outflows since February, with $2 billion exiting the market last week.
The sell-off marked the third consecutive week of withdrawals, bringing total outflows over the period to $3.2 billion.
The slump follows sharp price declines across major cryptocurrencies, which have pushed total assets under management in digital asset ETPs down 27% from their early-October peak of $264 billion to $191 billion.
Analysts cited ongoing monetary policy uncertainty and aggressive selling from crypto-native whale wallets as the main drivers behind the downturn.
The US accounted for the overwhelming share of outflows, with $1.97 billion leaving U.S.-based products.
Switzerland and Hong Kong followed at a distance, recording $39.9 million and $12.3 million in outflows.
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