BlackRock’s flagship iShares Bitcoin Trust recorded its largest daily outflow since launch, with investors withdrawing around $523 million on Tuesday, according to figures released by Farside Investors.
The move comes as bitcoin extended its recent slide, dropping below $90,000 this week. This was its weakest performance level in seven months. The cryptocurrency, often viewed as a barometer for wider digital asset sentiment, has been under pressure following a steep pullback since reaching an all-time high in October.
IBIT, the biggest spot bitcoin ETF in the market, has been one of the central products driving this year’s surge in crypto-based exchange-traded funds. Since its debut in January 2024, the fund has drawn significant investor interest. However, this latest wave of outflows highlights the depth of the current selloff in crypto and the wider retreat from risk assets.
Gold, meanwhile, has shown greater resilience, prompting some analysts to question bitcoin’s perceived role as a hedge asset or alternative store of value. Several market watchers have suggested that investors may be shifting from bitcoin exposure into gold.
“The crypto market entered a hangover in August,” said Kraken’s Global Economist Thomas Perfumo, noting that much of the earlier demand had been fuelled by leverage. “Momentum seemingly peaked during the summer. But the truth is this hangover trend started months ago,” he added.
Other analysts have attributed the downturn to profit-taking by long-term holders and increased caution among bitcoin treasury firms, which had ramped up purchases earlier in the year. “Bitcoin treasury companies purchased nearly $50 billion of bitcoin over the past year. Recently, many of these firms have begun trading at a discount to net asset value, which weighs on near-term market expectations for net new bitcoin purchases by these firms,” said Brian Vieten, research analyst at Siebert Financial.
The shift away from bitcoin comes as major investors continue to voice concerns about stretched valuations across asset classes. “An ongoing lack of speculative spirits is weighing on bitcoin,” said José Torres, senior economist at Interactive Brokers.
IBIT, which manages more than $73 billion in assets, has fallen 19% quarter-to-date.
