BlackRock's IBIT Has 1st Outflows as Crypto Fervor Dips

Risk-aversion moves into markets, and U.S. spot bitcoin ETFs have another day of outflows.

ETF.com
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Contributing Editor
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Reviewed by: etf.com Staff
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Edited by: Ron Day

U.S. spot bitcoin ETFs suffered their seventh consecutive day of outflows on Thursday as risk-averse investors continued to shy away from digital assets.

The 11 fledgling funds generated about $35 million in outflows yesterday and have totaled more than $1 billion in outflows since last Wednesday, according to U.K.-based Farside Investors.

The outflows represent a stark turnaround for the products, which, since the Securities and Exchange Commission (SEC) approved 10 funds on Jan. 10., have been among the most successful ETF launches over the past three decades, generating more than $11 billion in inflows. They now hold nearly $55 billion in assets.

The biggest among them, BlackRock Inc.’s iShares Bitcoin Trust (IBIT), has accumulated more than $16.5 billion in assets and $15.5 billion in inflows. IBIT, the fastest ETF to generate $10 billion in assets, suffered its first outflows on Wednesday and had a net zero in flows on Thursday.

Grayscale’s Grayscale Bitcoin Trust ETF (GBTC), which remains the largest spot Bitcoin fund with $17.5 billion in assets, bled $55 million in outflows on Thursday. It has suffered more than $17.1 billion in outflows since it started trading on Jan 11 along with IBIT and nine other products.

GBTC Continued Outflows

GBTC differs from its competitors in the space though because it’s a conversion from a trust and carries the highest fee by far of 1.5%.

The outflows have dovetailed with a decline in bitcoin’s price. The largest crypto by market cap has dropped 2.8% over the past week, according to cryptocurrency data provider CoinMarketCap.

Still, not all signs were pointed downward in the space as the first spot cryptocurrency ETFs to trade on the Hong Kong exchange launched and generated nearly $300 million in inflows on their first day.

On Thursday, according to an SEC filing, BNP Paribas purchased more than $41,000 in IBIT during its first quarter.

In her Crypto Is Macro Now newsletter, markets analyst Noelle Acheson wrote: "I still think we'll see institutional investors tiptoe into the crypto market, through the ETFs and/or derivatives, with some corporations venturing to hold BTC on their balance sheets. But it will be a slow trickle for now, which could keep prices sideways a bit longer."

James Rubin is a contributing editor for etf.com, where he produces the Morning Exchange and Weekly Exchange newsletters. A longtime financial writer, editor and book author, he formerly held positions as a news and markets editor for the Americas at CoinDesk, where he focussed on cryptocurrencies. 

He provided editorial guidance for a Wall Street Journal best-selling book on Bitcoin and oversaw a startup newsroom focused on digital financial assets. He has edited for TheStreet and Unchained, where he wrote daily news stories about the trial of fallen crypto entrepreneur Sam Bankman-Fried. His writing has also appeared in The Hollywood Reporter, Forbes.com, AdWeek, Bankrate, The Financial Brand and The Wall Street Journal. He has also written for Forbes Insights and the Economist Intelligence Unit, including papers presented at World Economic Forums in Davos and Mumbai. 

James is the co-author of The Urban Cyclist’s Survival Guide (Triumph Books) and has been interviewed about bike safety on a number of NPR affiliates. In a prior career, Rubin was a world-ranked tennis player, once competing in Wimbledon’s qualifying rounds. He speaks fluent German and is a graduate of the Columbia University Graduate School of Journalism and received his BA at Columbia University.