BlackRock Bitcoin ETF Sees Record $523M Outflow

BlackRock’s flagship cryptocurrency fund has recorded its largest single-day withdrawal since its inception. On Tuesday, investors pulled approximately $523 million from the iShares Bitcoin Trust (IBIT), signaling a significant retreat from risk assets.

This massive capital flight coincides with a broader downturn in the crypto market. Bitcoin, the sector’s bellwether, recently dipped below the $90,000 mark, touching its lowest price point in seven months.

Since its debut in January 2024, the IBIT fund has been a primary driver of the cryptocurrency exchange-traded fund (ETF) boom, amassing over $73 billion in assets. However, these latest outflows underscore the severity of the current correction, which follows the asset’s record-breaking highs in October.

Bitcoin vs. Gold: The Safe Haven Debate

The current market dynamics have reignited the debate over Bitcoin’s role as a “store of value.” While digital assets have faced steep declines, gold prices have remained resilient.

This divergence challenges the long-held narrative that Bitcoin serves as a hedge against inflation or a “digital” replacement for yellow metal. Market observers suggest that the recent price action indicates investors are swapping Bitcoin exposure for the traditional stability of gold.

The “Market Hangover”

Economists suggest the crypto market is currently suffering from a “hangover” after momentum peaked during the summer. Analysts note that much of the previous rally was driven by leveraged demand, which is now unwinding.

This lack of speculative energy is weighing heavily on the sector. The IBIT fund itself has declined by 19 percent quarter-to-date, reflecting the broader hesitancy among institutional investors.

Corporate Buyers Pull Back

Another critical factor influencing the downturn is a shift in behavior among “Bitcoin treasury firms”—companies that hold large amounts of the cryptocurrency on their balance sheets.

• Over the past year, these firms purchased nearly $50 billion worth of Bitcoin.
• Recently, many of these companies have started trading at a discount relative to their net asset value.
• This discount is dampening expectations for new, large-scale Bitcoin purchases by corporations in the near term.

Combined with profit-taking by long-term shareholders, the market is facing a period of significant consolidation as valuations across risk asset classes appear stretched.

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