BlackRock's Bitcoin ETF Faces $2.7 Billion in Outflows, Longest Streak Since Launch

BlackRock's iShares Bitcoin Trust has experienced its most extended period of withdrawals since it was established in January 2024, indicating a significant shift in institutional attitude towards Bitcoin, even as prices stabilize.

Key Takeaways:

BlackRock's iShares Bitcoin Trust has faced its longest outflow streak ever, with over $2.7 billion pulled out in just five weeks.
This change follows a market downturn in October that wiped out over $1 trillion in cryptocurrency value and disrupted the Bitcoin Trust's previous flow of steady inflows.
Analysts are cautioning that this trend indicates a declining interest among institutional investors.

In total, investors withdrew more than $2.7 billion from the fund over the five weeks leading to November 28, according to data from SoSoValue. Redemptions persisted on Thursday, with an additional $113 million taken out, setting the ETF up for a sixth consecutive week of outflows.

BlackRock’s Bitcoin ETF Bleeds $2.7B in Longest Outflow Streak Since Launch

IBIT's Outflow Cycle Signals Market Caution

IBIT, which oversees assets worth over $71 billion, has been the primary route for traditional investors seeking regulated access to Bitcoin. However, since early October, the flow of funds has shifted direction. A severe liquidation in the crypto markets led to a sell-off that erased more than $1 trillion in digital assets.

This shift contrasts sharply with the steady inflows that previously helped Bitcoin rise earlier this year. Last week in São Paulo, BlackRock's business development director, Cristiano Castro, commented that the company’s Bitcoin ETFs have emerged as significant revenue sources, describing their rapid growth as “a big surprise” as investor allocations soared throughout the year.

Castro also addressed concerns about outflows, stating that "ETFs are very liquid and powerful instruments," and noted, “What we’ve been witnessing is completely normal; any asset that begins to experience compression usually behaves this way, particularly one influenced heavily by retail investors.”

While Bitcoin regained some of its losses this week, analysts contend that ETF flows reveal a clearer indication of cautious institutional behavior. A recent report by Glassnode highlighted that the outflow streak signifies a notable turnaround from the consistent inflow pattern that previously supported Bitcoin's price, reflecting decreased new investments in the asset. The firm observed that investor positioning has become increasingly defensive due to ongoing volatility and funding pressures.

Despite market fluctuations, Bitcoin traded around $92,000 in London on Friday morning, which is still down 27% from its peak in October.

Positive Start for Spot Chainlink ETF

In news related to crypto regulation, Grayscale’s first U.S. spot exchange-traded fund (ETF) linked to Chainlink launched with robust demand. The product ended its debut day with $41 million in net inflows and approximately $13 million in trading volume.

These figures positioned Chainlink among the stronger ETF launches of the year, suggesting that a section of investors still favors regulated channels for investing in higher-risk digital assets.

The Chainlink ETF's launch arrives alongside an influx of new altcoin ETFs. Over the past month, several products linked to Solana, XRP, and Dogecoin have been introduced, with more XRP and Dogecoin funds scheduled to list next week. Notably, the Canary Capital XRP ETF (XRPC) premiered with $58 million in net inflows, making it the best first-day performance for any ETF this year, just ahead of the Bitwise Solana Staking ETF (BSOL), which opened with $57 million.