Key Insights:
- Bloomberg’s Eric Balchunas says the outflows from BlackRock Bitcoin ETF (IBIT) are not alarming.
- IBIT’s withdrawals of $2.2B represent only about 3% of AUM, with 97% of investors remaining despite a 35% BTC drawdown.
- Despite recent selling pressure and a 25% monthly decline in IBIT’s share price, short interest has dropped back to April levels.
BlackRock Bitcoin ETF (IBIT) has been leading most of the outflows from the BTC funds, bleeding more than $2.2 billion in November so far. This follows months of steady inflows after the BTC price continued to see selling pressure dipping under $85,000 earlier this week. However, market experts believe that it is not a major sign of concern, while IBIT shares show renewed upside momentum.
BlackRock Bitcoin ETF Nov Outflows Shoot to $2.2 Billion
On Monday, November 24, the BlackRock Bitcoin ETF (IBIT) recorded a net outflow of 1,679 Bitcoin valued at approximately $143.48 million, with trading volume reaching $4.2 billion. So far in November, the largest ETF fund for Bitcoin has seen a broader trend of withdrawals. As per the CNBC data, IBIT has seen more than $2.2 billion in net outflows this month.
Apart from BlackRock, the outflows have been prominent across other US ETF issuers as well! Market intelligence platform Santiment reported that U.S. Bitcoin exchange-traded funds have recorded significant withdrawals, totaling approximately $2.81 billion since November 12. The trend accelerated late last week, with Thursday’s outflow of $891.5 million marking the largest single-day withdrawal of the year.
Why BlackRock Bitcoin ETF Shows Greater Outflows?
However, some investors are worried, particularly due to BlackRock’s IBIT showing greater outflows than its peers. But Bloomberg’s senior ETF analyst Eric Balchunas noted that this is not a major cause of concern.
Balchunas commented on the recent BlackRock iShares Bitcoin Trust (IBIT) outflows. He noted that the decline drew outsized attention largely because IBIT had never recorded outflows before.
Balchunas added that the withdrawals represent roughly 3% of the fund’s assets under management. He said the focus on the outflow figures overlooks the broader trend, stating that about 97% of IBIT investors have remained in the fund despite a roughly 35% drawdown in Bitcoin.
However, during the earlier trading sessions on November 25, the IBIT share selling pressure has continued further. Data from blockchain analytics firm Arkham Intelligence shows that BlackRock Bitcoin ETF transferred an additional 4,471 Bitcoin, valued at approximately $390.8 million, to Coinbase Prime.
IBIT Share Selling Pressure Drops
Amid the continuous BTC price sell-off, and strong outflows from Bitcoin ETF, the IBIT share price has corrected 25% over the past month. As of now, the share is currently flirting with $50.
Bloomberg’s Eric Balchunas stated that the short interest for IBIT share has dropped sharply. Although short interest was already modest at around 2% of shares, it has now fallen close to levels last seen in April before the market rally.
According to data from S3 Partners, traders typically increase short positions during periods of strength. They later reduce them during market pullbacks, a trend consistent across ETFs. Thus, the downside for IBIT share looks limited from here.
Bhushan is a FinTech enthusiast and holds a good flair for understanding financial markets. His interest in economics and finance draws his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In his free time, he reads thriller fiction novels and sometimes explores his culinary skills.
