According to data from Farside Investors, investors withdrew approximately $523 million in BlackRock’s flagship iShares Bitcoin Trust on Tuesday, resulting in the biggest fund’s single-day withdrawal since its launch.
A bellwether for crypto markets, Bitcoin has dropped to $90,000 this week, the lowest point in seven months. The biggest spot bitcoin ETF, IBIT, has experienced high levels of investor demand since its debut in January 2024 and has been a focal point of the crypto ETF boom.
The outflow of funds reflects the scale of the selloff in bitcoin, which has reversed harshly after touching a record high in October, and reflects how profound the pullback has been in risk assets.
However, gold has so far proved to be resilient; the question arises of whether bitcoin is a hedge or an alternative to the yellow metal. Other commentators have reported that the actions indicate that investors are moving bitcoin exposure to gold.
Kraken’s Global Economist Thomas Perfumo stated that “The crypto market entered a hangover in August,” and a huge demand was driven by borrowed money.
He said, “Momentum seemingly peaked during the summer. But the truth is this hangover trend started months ago.”
Analysts have also identified profit-taking both by long-term shareholders and an increased caution on the part of bitcoin treasury firms that had been increasing their purchases earlier in the year.
Senior Research Analyst of Siebert Financial, Brian Vieten, reported that “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.”
The drift coincides with the period when multiple heavyweight investors have complained of overstretched valuations across asset classes.
Senior Economist of Interactive Brokers, José Torres, said, “An ongoing lack of speculative spirits is weighing on bitcoin.” IBIT, with a total of over $73 billion in assets, has dropped 19 percent quarter-to-date.
