The iShares Bitcoin Trust (IBIT) has experienced a notable downturn, shedding $1.4 billion over five consecutive trading days—the largest decline in its 22-month existence. Managing over $73 billion in assets, IBIT remains the largest spot Bitcoin exchange-traded fund (ETF) by assets under management, but its recent struggles have raised concerns among investors.
On Tuesday alone, the fund witnessed a record single-day outflow of $523 million, marking a significant extension to its five-day streak of outflows. According to UK asset manager Farside Investors, this current stretch highlights the challenges facing the ETF, with Bloomberg Senior ETF Analyst Eric Balchunas commenting on X that the situation has been dire, albeit net inflows for the year still stand at a remarkable $25 billion.
IBIT’s troubles have unfolded against a backdrop of broader macroeconomic uncertainty, including a prolonged government shutdown in the United States, inflation concerns, a trade war, disappointing job data, and the repercussions of artificial intelligence developments on major tech firms. In parallel, the price of Bitcoin recently dipped to a seven-month low of $89,037, representing a drop of over 4% in just 24 hours and a year-to-date decrease of 4%, following its peak above $126,000 just six weeks prior.
Market predictions indicate a bleak outlook for Bitcoin, with users in a prediction market giving only a 28% chance that Bitcoin will rise to $115,000 in its immediate future, contrasting starkly with the possibility of a downturn to $85,000. IBIT shares reflected this negative sentiment, falling 3.6% on Wednesday and more than 16% over the past month.
Previously, IBIT set a record for outflows last Friday with $463 million and had only exceeded $400 million in outflows on two prior occasions. The fund had seen a remarkable ascent, achieving $70 billion in inflows faster than any ETF in the 32-year history of the industry. Despite its size, institutional interest in Bitcoin remains evident, as exemplified by Harvard University increasing its IBIT holdings from 1.9 million shares to 6.8 million shares, valued at approximately $442 million.
Other Bitcoin-focused ETFs have also struggled during this tumultuous period. The Fidelity Wise Origin Bitcoin Fund (FBTC) and Grayscale Bitcoin Trust (GBTC) reported outflows of more than $266 million and $146 million, respectively, over the past week, although no significant withdrawals were recorded on Tuesday.
In contrast, budding funds linked to Solana have seen incoming investments. The Bitwise Solana Staking ETF (BSOL) has recorded net inflows every day since its launch, amassing $611 million in assets. Additionally, the 21Shares Solana ETF (TSOL) recently became the fifth Solana-focused fund to be listed on a U.S. exchange.
As the market continues to shake off uncertainties and investors adjust their strategies, IBIT and other Bitcoin funds will be closely watched in the coming days and weeks for signs of recovery or further decline.
