BlackRock’s iShares Bitcoin Trust (IBIT) faced an unprecedented $332.6 million outflow on January 2, marking a historic decline. This Bitcoin ETF’s outflows were the largest since the fund’s launch.
They capped three consecutive days of redemptions and this trend emerged as U.S. markets reopened after the New Year holiday.
BlackRock Bitcoin ETF Remains Market Leader
The January 2 withdrawal broke the previous record of $188.7m recorded on December 24, raising questions about the fund’s performance.
Total redemptions were $392.6 million over the last week, showing that investor withdrawals are a continuing trend. Nevertheless, BlackRock’s Bitcoin ETF is still the market leader in the United States.
For the 2024 net inflows, IBIT took third place among the U.S.-listed ETFs, gaining $37.2 billion. It was behind only the Vanguard 500 Index Fund and the iShares Core S&P 500 ETF, which saw inflows of $116bn and $89bn, respectively.
These figures showed that IBIT has performed well previously, more so during the year-end sales bust.
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Crypto ETF Market Sees Major January Losses
On January 2, BlackRock’s Bitcoin ETF was plagued with trouble as other contenders like Bitwise, Fidelity, and Ark 21Shares enjoyed inflows to assets.
Bitwise, Fidelity, and Ark 21Shares snagged $48.3 million, $36.2 million, and $16.5 million in new investments, respectively.
Its flagship GBTC fund saw a $23.1 million outflow, but Grayscale’s Bitcoin Mini Trust registered modest inflows of $6.9 million.
BlackRock’s losses on January 2 drove $242 million in net outflows from the overall cryptocurrency ETF market.
However, this development also suggested that investor preferences might be shifting, and rival funds couldn’t help but offset gains. According to analysts, the competition for Crypto ETF may heat up in the following years.
Ethereum ETFs Gain Momentum Amid Market Volatility
According to industry experts, the cryptocurrency ETF market’s landscape is poised to drastically change by 2025.
The company plans to launch Bitcoin and Ether combined ETFs and potentially approved Solana spot ETFs. It seeks to offer investors more variety and make the market more attractive.
Net inflows for spot Bitcoin ETFs in the U.S. in 2024 came to $35.66 billion, more than early estimates envisioned.
The leader was BlackRock, which hoovered up $37.31 billion, followed by Fidelity and Ark, which managed $11.84 billion and $2.49 billion, respectively. Bitwise’s Bitcoin ETF was another in the mix, attracting $2.19 billion in inflows.
After December 19, though, Bitcoin ETFs fell into the red, with $1.33 billion in outflows reported by year-end. In terms of Ethereum, both BlackRock’s iShares Ethereum Trust ETF and Fidelity Ethereum Fund received $3.52 billion and $1.56 billion inflows, respectively.
These trends illustrate the still young (but volatile) cryptocurrency ETF market. With positive cryptocurrency price movements as a backup, market professionals believe 2025 may bring a Bitcoin ETF resurgence.
As more people get on board and regulations improve, some are predicting that Bitcoin ETFs will be one of the most popular types of ETFs, just like traditional stock ETFs.
Fund managers remain bullish on growing their portfolios through innovative, investor-focused products. BlackRock’s Bitcoin ETF might not be the best play in the world now, but it’s still effective in the conversation.
