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- The Bitcoin ETF record achieved a peak of $671.9 Million this Thursday.
- On December 20, Blackrock Bitcoin ETF saw its largest outflow of $71.9 Million since its launch in January.
- This recent massive withdrawal dismantled the 16-day inflow streak.
On December 20, 2024, the crypto community witnessed a significant event. Blackrock’s iShares Bitcoin Trust (IBIT) recorded its largest single-day net outflow.
The withdrawal of $72.7 Million marked a watershed point for this Blackrock Bitcoin ETF since its inception. It corresponded with a larger market decline that ended a 16-day inflow run.
This substantial outflow from Blackrock’s IBIT followed a similar pattern seen earlier this week in Fidelity’s FBTC. This demonstrated the investors’ declining willingness to take on risk.
The Outflow
This outflow event was part of a significant trend in the US market for spot Bitcoin ETFs. BlackRock’s IBIT lost its 16-day streak of inflows on December 18, as reported by Farside Investors data.
The market’s fluctuating performance mirrored the uncertainty among the investors. This uncertainty was possibly fueled by the recent BTC price decline and macroeconomic factors affecting the crypto sector.
Consequently, Blackrock’s Bitcoin ETF saw no flows on December 19. On Friday, December 20, a day later, it had a $72.7 Million outflow. Just a day before this incident, Fidelity’s Bitcoin ETF (FBTC) also suffered its largest outflow, amounting to $208.5 Million.
Bitcoin ETF outflows hit a new high with these two large withdrawals. Total withdrawals from the US Spot Bitcoin ETF were $671.9 Million on December 19 and $277 Million on December 20.
The $671.9 Million record even exceeds the $564 Million negative flow high set on May 1, 2024. In addition to Fidelty’s FBTC and Blackrock’s IBIT, additional players were crucial in setting this record.
A total of $188.5 Million was taken out of Grayscale’s Bitcoin mini fund. Additionally, more than $108.35 Million of the total outflows during the Thursday trading session came from Ark Invest’s ARKB.
Other notable outflows were reported from Grayscale’s GBTC, with $87.86 Million, and Bitwise BTIB, with $43.61 Million. Moving ahead, Invesco Galaxy’s BTCO and VanEck’s HODL contributed $25.97 Million and $10.91 Million, respectively.
The Ethereum ETF market followed the suit. It witnessed outflows of $60.5 Million and broke the 18-day run of positive flows.
However, the trading volume of Bitcoin ETFs increased significantly in the significant market sell-off. It reached to $6.31 Billion, a substantial rise over the previous day’s $5.86 Billion.
Factors Driving the Outflows
This significant Blackrock Bitcoin ETF outflow with others can be attributed to several key factors. One of the major factors could be the BTC price volatility. Recently, the Bitcoin price dropped to $96000 after skyrocketing over the $100,000 mark.
This kind of sharp decline often results in investors withdrawing their funds from the related ETFs. Investors make this move to mitigate potential losses.
The reason behind the drop in BTC price was the recent rate cuts introduced by the Fed. This year’s cutbacks reached 1% as the agency implemented another 0.25 bps rate cut. This signaled a cautious stance on future cuts.
Fed’s hawkish remarks on interest rates spooked crypto ETF investors, leading to a sell-off in the market. Another factor could be the profit booking.
The BTC price recently achieved the milestone of $100K. Some investors may have decided to cash out their profits. This could have influenced the increased Bitcoin ETF outflow.
Disclaimer
This article is for informational purposes only and provides no financial, investment, or other advice. The author or any people mentioned in this article are not responsible for any financial loss that may occur from investing in or trading. Please do your research before making any financial decisions.
