BlackRock’s US-listed Bitcoin fund, known as iShares Bitcoin Trust (IBIT), experienced its largest outflow in nine weeks on Monday, with $292.5 million withdrawn. This marks the biggest withdrawal since May, following a minor outflow on Friday which ended a 37-day streak of consistent inflows.
This shift occurred amidst Bitcoin’s dip from its July 14 all-time high, where it dropped 8.5% over the weekend reaching a low of $112,300 on Sunday, before rebounding slightly to $115,000 by Monday’s late trading session.
Despite this recent outflow, BlackRock’s fund saw a substantial net inflow of $5.2 billion in July alone, representing 9% of the total inflows the ETF has accumulated since its January 2024 launch.
Related: BlackRock iShares Bitcoin ETF surpassed 700,000 Bitcoin holdings, demonstrating strong institutional interest.
Spot Bitcoin ETFs Show Cooling Momentum
Monday marked the third consecutive trading day that US-listed spot Bitcoin ETFs collectively experienced net outflows. Fidelity’s Wise Origin Bitcoin Fund (FBTC) saw an outflow of approximately $40 million, while the Grayscale Bitcoin Trust (GBTC) experienced a $10 million withdrawal. Other US-based ETFs maintained neutral flows, except for Bitwise (BITB), which recorded an inflow of $18.7 million.
The downward flow appeared to slow as Bitcoin found support around $112,000, with Monday’s outflow significantly less severe than the $812 million outflow recorded on Friday.
Digital Assets Gain Alternative Market Share
The broader institutional digital asset landscape is showing positive signs this year. According to Bloomberg ETF analyst Eric Balchunas, while private asset fundraising cools, digital assets and hedge funds have accelerated inflows, gaining market share in alternative investments.
JPMorgan’s expert Nikolaos Panigirtzoglou noted that digital assets and hedge funds have seen increased inflows this year, contrasting starkly with weak fundraising in private equity and credit sectors.
Capital inflows into digital assets have become the fastest-growing segment within alternatives, attracting $60 billion by late July, following a record $85 billion in the previous year.
ETFs Contribute to Reduced Bitcoin Volatility
Balchunas also highlighted that Bitcoin’s volatility has eased following the introduction of spot Bitcoin ETFs. The 90-day rolling volatility of the BlackRock IBIT fund recently fell below 40 for the first time, down from over 60 at the ETF’s launch early in 2024.
Since the launch, Bitcoin has experienced significantly less sharp drawdowns, enhancing its appeal to institutional investors and bolstering its potential adoption as a functional currency.
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