Record Outflows from BlackRock's Bitcoin ETF

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Record Outflows from BlackRock's Bitcoin ETF

BlackRock's iShares Bitcoin Trust (IBIT) ETF recorded an outflow of $330.8 million on January 2, 2025, marking the largest fund outflow since its launch. This figure surpasses the previous record of $188.7 million noted on December 24, 2024. According to current data, this outflow is equivalent to over 3,500 Bitcoins, bringing the total net outflow for spot Bitcoin ETFs in the U.S. to $242 million.

IBIT has seen consecutive outflows over the last three trading days, reaching a weekly total outflow amount of $391 million. However, during the same period, rival ETFs such as Bitwise Bitcoin ETF (BITB) ($48.31 million), Fidelity Wise Origin Bitcoin Fund (FBTC) ($36.2 million), and ARK 21Shares Bitcoin ETF (ARKB) ($16.54 million) recorded positive inflows. These funds collectively achieved a net inflow of $108 million.

Despite these outflows, BlackRock’s IBIT ETF continues to hold its position as the largest Bitcoin ETF in the industry. As of December 31, 2024, IBIT manages assets equivalent to 551,000 BTC, representing 2.38% of the total Bitcoin supply. Throughout 2024, the fund secured $37 billion in inflows which placed it third on Bloomberg ETF analyst Eric Balchunas’s list, only trailing behind established index giants Vanguard S&P 500 ETF (VOO) and iShares Core S&P 500 ETF (IVV).

BlackRock analysts describe the growth of IBIT as "unique." The fund is expected to generate approximately $112 million annually with its current asset level and an expense ratio of 0.25%.

BlackRock’s Bitcoin Strategy Despite the success of the IBIT fund, BlackRock has indicated it does not plan to launch new altcoin-focused ETFs and will instead concentrate on Bitcoin and Ethereum ETFs. Jay Jacobs, head of the company’s ETF department, stated that they aim to expand the reach of existing Bitcoin and Ethereum ETFs and are satisfied with the performance of these funds.

Additionally, company analysts foresee that Bitcoin could secure a position between 1% and 2% in traditional 60/40 investment portfolios. This outlook contributes to making Bitcoin more appealing to institutional investors and supports fund flows.

Market Impact and General Outlook The record outflows from IBIT have caused fluctuations in the U.S. spot Bitcoin ETF market; however, the positive inflows in other large funds have provided balance to the overall industry outlook. Furthermore, the confidence of major players like BlackRock in Bitcoin lays an important foundation for the long-term growth of the cryptocurrency market.

Despite the record levels of outflows, IBIT’s ability to maintain its leading position signals that the fund will continue to play a dominant role in the Bitcoin ETF market.