BlackRock’s iShares Bitcoin Trust (IBIT) recorded its largest single-day outflow since launch on Tuesday, as investors withdrew $523 million. The move highlights growing caution in the cryptocurrency market amid a broader downturn.
Bitcoin has fallen nearly 30% from its October peak, reaching its weakest level since April. This decline comes after an October 10 liquidation event wiped out roughly $19 billion in leveraged positions, which the market has yet to recover from.
The outflow from IBIT marked the fund’s fifth consecutive day of redemptions, according to SoSoValue data. More than $3 billion has left the 12 U.S. spot Bitcoin ETFs so far this month, with nearly $2 billion coming from IBIT alone.
Despite its recent struggles, IBIT remains the largest U.S. spot Bitcoin ETF. Since its January 2024 debut, the fund has gathered over $72 billion in assets and attracted $26 billion in inflows this year, dominating the U.S. market.
Market analysts say the redemptions reflect growing caution among institutional investors amid economic uncertainty. Dilin Wu, research strategist at Pepperstone, said, “ETF outflows combined with long-term holder sales have tightened market liquidity, pushing short-term Bitcoin prices lower and highlighting weakening market confidence.”
Options traders are also hedging against further losses. Sean Dawson, head of research at Derive.xyz, noted that many investors are buying protection against Bitcoin falling to $80,000 by late December. “With ongoing concerns about the U.S. job market and uncertainty around interest rates, there’s little reason for traders to stay bullish into year-end,” he said.
The downturn is not limited to BlackRock’s ETF. Digital asset investment products saw $2 billion in outflows last week, marking their heaviest weekly withdrawals since February. Total assets under management in digital asset ETPs have dropped 27% from their early-October peak of $264 billion to $191 billion. Most of these outflows originated from the U.S., with smaller amounts from Switzerland and Hong Kong.
The recent sell-offs underscore the vulnerability of the crypto market to both macroeconomic uncertainty and aggressive selling by large holders.
