Investors withdrew about $523 million from BlackRock’s iShares Bitcoin Trust ETF on Tuesday (18), according to data from Farside Investors, marking the largest outflow of resources in a single day from the fund since its launch.
Bitcoin fell below $90,000 this week, its lowest level in seven months. This Wednesday (19), cryptocurrency showed a drop of 3.5%, at US$89,200, around 3:20 pm (Brasília time).
IBIT, the largest spot bitcoin ETF, has attracted strong investor demand since its launch in January 2024 and has been instrumental in the boom in digital currency ETFs.
The outflows highlight the intensity of the bitcoin sell-off, which highlights the depth of the pullback across all risk assets.
In contrast, gold remained resilient, calling into question bitcoin’s status as a hedge or substitute for the yellow metal. Some analysts said the moves point to the fact that investors are swapping exposure to bitcoin for gold.
“The crypto market entered a hangover in August,” said Kraken global economist Thomas Perfumo, adding that much of this demand was driven by borrowed money.
“The momentum apparently peaked during the middle of the year. But the truth is that this hangover trend started months ago,” he added.
Analysts also pointed to profit-taking by long-term investors, as well as growing caution among bitcoin hoarding firms, which had increased purchases earlier in the year.
“Bitcoin companies purchased nearly $50 billion worth of bitcoin last year. Recently, many of these companies have begun trading at a discount to their net asset value, which weighs on near-term market expectations for net new bitcoin purchases by these companies,” said Brian Vieten, research analyst at Siebert Financial.
The move comes at a time when several heavyweight investors have raised concerns about inflated valuations across asset classes.
“A continued lack of speculative sentiment is weighing on bitcoin,” said José Torres, senior economist at Interactive Brokers.
O GO which has more than US$73 billion in assets, fell 19% in the quarter.
