BlackRock’s iShares Bitcoin Trust (IBIT) faced an unprecedented outflow of $332.6 million on Jan. 2, marking a historic decline. The outflows of this Bitcoin ETF were the largest since the fund’s launch.
They limited purchases for three consecutive days and that trend emerged when US markets reopened after the New Year holiday.
The BlackRock Bitcoin ETF remains the market leader
The Jan. 2 withdrawal shattered the previous record of $188.7 million set on Dec. 24, raising questions about the fund’s performance.
Total redemptions totaled $392.6 million over the past week, indicating that investor withdrawals are a continuing trend. Despite this, BlackRock’s Bitcoin ETF remains the market leader in the United States.
In terms of net inflows for 2024, IBIT ranked third among US ETFs, receiving $37.2 billion. It was behind only the Vanguard 500 Index Fund and the iShares Core S&P 500 ETF, which saw inflows of $116 billion and $89 billion, respectively.
These figures showed that IBIT had previously performed well, and even more so during the year-end sales slump.
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The crypto ETF market recorded heavy losses in January
On January 2, BlackRock’s Bitcoin ETF struggled as other contenders like Bitwise, Fidelity and Ark 21Shares enjoyed asset inflows.
Bitwise, Fidelity and Ark 21Shares won $48.3 million, $36.2 million and $16.5 million respectively in new investment.
Its flagship GBTC fund saw outflows of $23.1 million, but Grayscale’s Bitcoin Mini Trust saw modest inflows of $6.9 million.
BlackRock’s losses on Jan. 2 led to a net outflow of $242 million from the overall cryptocurrency ETF market.
However, these developments also suggested that investor preferences may be changing, and rival funds could not help but recoup the gains. According to analysts, the competition for Crypto ETFs could heat up in the coming years.
Ethereum ETFs Gain Momentum Amid Market Volatility
According to industry experts, the cryptocurrency ETF market landscape is poised to change drastically by 2025.
The company plans to launch combined Bitcoin and Ether ETFs and potentially approved Solane spot ETFs. It seeks to offer investors greater diversity and make the market more attractive.
Net inflows for spot Bitcoin ETFs in the US in 2024 were $35.66 billion, higher than early estimates.
The leader was BlackRock, which earned $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 line, attracting $2.19 billion in inflows.
After December 19, however, Bitcoin ETFs fell into the red, with $1.33 billion in reported outflows by the end of the year. As for Ethereum, both BlackRock’s iShares Ethereum Trust ETF and Fidelity Ethereum Fund received $3.52 billion and $1.56 billion, respectively.
These trends illustrate the still young (but volatile) cryptocurrency ETF market. With the cryptocurrency’s positive price movements as a backup, market professionals believe that 2025 could bring a revival of Bitcoin ETFs.
As more people get involved and regulations improve, some predict that Bitcoin ETFs will be one of the most popular types of ETFs, just like traditional stock ETFs.
Fund managers remain poised to grow their portfolios through innovative investor-focused products. BlackRock’s Bitcoin ETF may not be the best play in the world right now, but it’s still effective in the conversation.
