A key player in the cryptocurrency sector found itself in an unexpected position in history after it faced its most significant outflows in months.
The prominent asset manager BlackRock ended the inflow pattern of its Bitcoin exchange-traded fund (ETF) after enduring an outflow of $72.7 million on December 20.
Record-Sized Outflow
Data indicates that BlackRock’s Bitcoin ETF (IBIT) experienced the largest outflow since its inception in January of this year.
As per Farside Investors, the global asset manager’s Bitcoin ETF recorded an outflow of $72.7 million in December, marking the highest total for IBIT since it was launched. They mentioned that this occurred just a day after IBIT reported no flows, raising concerns among investors regarding the ETF.
IBIT was not the only fund impacted; its competitor, Fidelity Wise Origin Bitcoin Fund (FBTC), also faced an unprecedented outflow of $208.5 million on December 19, a day prior to IBIT experiencing a similar situation.
On December 20, FBTC recorded an additional outflow of approximately $71.9 million, resulting in a two-day outflow streak for the ETF.
Both IBIT and FBTC are recognized as top-performing exchange-traded funds in the United States, being ranked first and second among the top 25 ETFs by assets shortly after they entered the market.
Market analysts noted that the unprecedented two-day outflow in the US Spot Bitcoin ETF market was largely driven by the significant outflows at BlackRock and Fidelity.
Data revealed that the ETF market lost $671.9 million on December 19, followed by another $277 million outflow the next day, December 20.
Investor Concerns Rise
The substantial outflows from two of the most significant ETF issuers in the US have raised alarms among cryptocurrency investors regarding the possible future of these ETFs.
Nevertheless, analysts suggested that the challenges faced by BlackRock and Fidelity should not take traders by surprise, as both international asset management firms have been responsible for the notable inflows up until this point.
Some investors worry that these recent developments in ETFs could represent a turning point that may lead to a significant decline in the demand for Bitcoin among institutional investors.
Market observers contend that the outflows may not be lasting, adding that after Bitcoin dropped to $92,710 earlier, the predominant cryptocurrency has been recovering and trending upwards once more.
Decline in Bitcoin’s Volume
Trading analysts noted that Bitcoin’s market volume fell to $59.50 billion, marking a 52% decrease in total volume, which contrasts sharply with the bullish momentum seen following Donald Trump’s recent election victory.
During the crypto bull market, Bitcoin reached its all-time high of $108,000 per coin in November.
That same month, the US spot Bitcoin ETF also benefitted from the thriving crypto market, achieving a record $6.2 billion in net inflows.
As of the latest update, Bitcoin is trading at $95,359 per coin, reflecting a 1.3% decline over the past 24 hours, while maintaining a total market capitalization of $1.9 trillion.
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