BlackRock’s iShares Bitcoin Trust (IBIT) kicked off 2025 with a historic milestone, albeit not a celebratory one. On January 2, the fund experienced a massive outflow of $332.6 million, the largest single-day withdrawal since its launch a year ago. This event highlights a significant shift in market sentiment and raises questions about the future trajectory of Bitcoin ETFs.
Consecutive Days of Decline
The January 2 record follows a trend of sustained outflows, marking three consecutive days of redemptions for the fund. This unprecedented withdrawal surpassed the previous record of $188.7 million, set just days earlier on December 24. Over the past week alone, BlackRock’s Bitcoin ETF has recorded staggering total outflows of $392.6 million, according to Farside Investors.
While these numbers may seem alarming, it’s important to note that BlackRock’s Bitcoin ETF remains a heavyweight in the U.S. market. Despite recent setbacks, the fund secured third place in net inflows among all U.S.-listed exchange-traded funds in 2024, raking in $37.2 billion. Only the Vanguard 500 Index Fund (VOO) and the iShares Core S&P 500 ETF (IVV) achieved higher figures.
Competing Funds See Gains
While BlackRock’s Bitcoin ETF faced redemptions, its competitors experienced more positive trends. On the same day, Bitwise, Fidelity, and Ark 21Shares reported inflows of $48.3 million, $36.2 million, and $16.5 million, respectively. Grayscale’s Bitcoin Mini Trust also managed a minor inflow of $6.9 million, although its flagship GBTC fund saw an outflow of $23.1 million.
The overall cryptocurrency ETF market recorded net outflows of $242 million on January 2, largely driven by BlackRock’s performance. However, these figures were partially offset by gains from other funds, signaling a diverse market response.
A Promising Outlook for 2025
Looking ahead, the cryptocurrency ETF landscape remains dynamic. Industry leaders, including ETF Store president Nate Geraci, predict continued innovation in the sector. The launch of hybrid Bitcoin and Ether ETFs and the potential approval of spot Solana ETFs are among the anticipated developments that could reshape the market.
In 2024, U.S. spot Bitcoin ETFs collectively recorded over $35 billion in inflows, exceeding early projections by a wide margin. BlackRock’s iShares Bitcoin Trust led the pack with $37.31 billion, followed by Fidelity’s Wise Origin Bitcoin Fund and ARK’s 21Shares Bitcoin ETF. Ether ETFs also gained traction, with BlackRock’s iShares Ethereum Trust ETF and Fidelity’s Ethereum Fund attracting billions in inflows.
Conclusion
The recent outflows from BlackRock’s Bitcoin ETF may indicate short-term market volatility rather than a long-term trend. As Bitcoin’s price trajectory unfolds and regulatory clarity improves, the fund’s performance could rebound. With growing competition and innovative products on the horizon, 2025 promises to be a pivotal year for the cryptocurrency ETF market.
