BlackRock, the leading asset manager with outstanding performance in the Bitcoin exchange-traded fund (ETF) market, has made an unusual history.
The BlackRock iShares Bitcoin Trust (IBIT) which has enjoyed a record 16-day streak of inflows, could not sustain the momentum.
The inflow streak ended as the broader cryptocurrency market witnessed a pullback earlier this week.
Record Outflows Hit BlackRock and Fidelity
Farside Investor data show that BlackRock’s IBIT ended its inflow streak on December 18.
On December 19, it registered zero flows and suffered an outflow of $72.7 million a day later. This marks the highest outflow by IBIT since its launch in January.
Meanwhile, Fidelity’s FBTC recorded its highest outflow at $208.5 million on December 19, when IBIT had zero flows.
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On December 20, FBTC registered a second consecutive outflow worth $71.9 million. The outflows suffered by Fidelity and BlackRock fueled the ETF market’s record for two straight days of outflows.
The ETF posted $671.9 million and $277 million outflows on December 19 and 20, respectively.
Analysts maintain the development is not surprising as both asset managers have largely accounted for the large inflows. This has, however, triggered concerns among investors on future outlook.
Many argue that the recent development could signal a huge decline in the appetite of institutional investors for Bitcoin exposure.
However, analysts insist outflows might not linger. This is because Bitcoin, which had shocked the market with a sharp plunge to $92,710 earlier, has rebounded.
As of this writing, BTC price was trading at $97,325.68, up 3% in 24 hours. However, concerns remain among investors despite the price rally.
Bitcoin’s market volume has declined by 52.03% to $59.51 billion. This contrasts with the bullish run the coin enjoyed shortly after Donald Trump’s election win in November.
The bull run saw Bitcoin hit an all-time high (ATH) of $108,000 this month. On the ETF side, spot Bitcoin ETF reached a record-breaking milestone of $6.2 billion in net inflows in November.
Implications for Institutional Appetite
The ongoing market fluctuations appear to have shifted investment dynamics among players in the ETF space.
BlackRock and Fidelity’s outflows suggest some institutional investors are weighing their options on Bitcoin as an investment instrument.
Despite the broader cryptocurrency market trend, one notable institutional investor remain bullish on Bitcoin.
MicroStrategy, the business intelligence firm, has continued its Bitcoin accumulation strategy with additional purchases to increase its holding.
MicroStrategy’s approach reveals the company’s unshaken confidence in the future outlook of Bitcoin.
Although the ecosystem has recorded a significant selloff recently, some market observers have attributed this to other macroeconomic factors.
Notably, the selloff remain pinned to the U.S. Federal Reserve rate cuts by 25 basis points and future uncertainty.
This has led to a general decline in the broader financial sector, not just in the crypto space.
Despite this seeming gloomy outlook, analysts remain optimistic that Bitcoin and the spot Bitcoin ETF market will rebound.
Analysts Maintain Optimism Amid Uncertainty
Meanwhile, Nate Geraci, President of the ETF Store, in a post on, X provided interesting insight to the weekly ETF news.
As per the Year-to-Date (YTD) figures, Grayscale Bitcoin Trust (GBTC) and Hashdex Bitcoin ETF (DEFI) performed remarkably well. Both were among the YTD top leaders.
The chart shows Grayscale’s GBTC with a YTD growth rate of 147.21%, while Hashdex’s DEFI registered 116.62%.
As 2024 gradually winds down, analysts look forward to how the digital asset market will close and 2025 projections.
