Emily Walker
A significant event unfolded in the cryptocurrency sphere when a notable asset management firm faced its largest withdrawal in several months.
On December 20, BlackRock, a prominent asset manager, reported a $72.7 million outflow from its Bitcoin exchange-traded fund (ETF), ending its previous streak of inflows.
Record-Breaking Outflow
Recent data indicated that the BlackRock Bitcoin ETF (IBIT) experienced its highest outflow since its inception in January.
As per Farside Investors, the outflow of $72.7 million in December marked the most significant drop for IBIT. This occurred just after IBIT recorded no inflows, raising investor concerns about the ETF’s stability.
IBIT faced challenges not only on its own; the Fidelity Wise Origin Bitcoin Fund (FBTC) also encountered a record outflow, totaling $208.5 million on December 19, immediately preceding IBIT’s downturn.
On December 20, FBTC also saw further outflows of approximately $71.9 million, leading to consecutive days of withdrawals for the ETF.
IBIT and FBTC rank among the top-performing ETFs in the United States, holding the first and second positions among the leading 25 ETFs by assets after just one month of trading.
Market analysts noted that the unprecedented consecutive outflows in the U.S. Spot Bitcoin ETF sector were significantly driven by the outflows from BlackRock and Fidelity.
Overall, the ETF market reported losses of $671.9 million on December 19, followed by an additional $277 million outflow the next day.
Investor Unease
The substantial withdrawals by these leading ETF firms have raised red flags among cryptocurrency investors, prompting questions about the future of ETFs in the months ahead.
Nonetheless, analysts assert that the difficulties faced by BlackRock and Fidelity should not be surprising, as these firms are responsible for much of the inflow activity in the market.
There are concerns that these latest developments might signal a decline in institutional interest in Bitcoin investments.
Despite the outflows, some market analysts contend that these trends might be short-lived. Following a dip to $92,710, Bitcoin has started to show signs of recovery.
Decrease in Bitcoin Volume
Trading experts pointed out that Bitcoin’s market volume has fallen to $59.50 billion, representing a 52% drop, contrasting the previous bullish trend after Donald Trump’s election victory last month.
During the recent surge, Bitcoin peaked at its highest price of $108,000 per coin in November.
That month, the US Spot Bitcoin ETF also capitalized on the bullish sentiment, achieving a record of $6.2 billion in net inflows.
As of the latest update, Bitcoin’s price stands at $95,359 per coin, reflecting a 1.3% decline over the past 24 hours, with a total market capitalization of $1.9 trillion.
Image courtesy of CNN, chart sourced from TradingView