Among the outstanding performances in the cryptocurrency ETF market, BlackRock is undoubtedly one of the best. Its iShares Bitcoin Trust (IBIT) has set a record of 16 consecutive days of capital inflows. However, with the recent market correction, the momentum of capital inflows has finally come to an abrupt halt, and BlackRock and Fidelity are also facing unprecedented capital outflow pressure.
Record outflows
According to Farside Investor data, BlackRock's IBIT ended its streak of inflows on December 18. Then, on December 19, IBIT's inflows were almost zero, and then on December 20, it suffered a record outflow of $72.7 million, the largest single-day outflow since the fund was launched in January.
At the same time, Fidelity's FBTC was not immune, with an outflow of $208.5 million on December 19, and then on December 20, Fidelity's outflows reached $71.9 million again. This series of outflows reflected the nervousness of the market, and also caused the ETF market to experience outflows for two consecutive days on December 19 and 20.
Market volatility and institutional investors’ vacillation
Analysts believe that the outflow of funds from BlackRock and Fidelity is not entirely surprising, after all, these two companies occupy a large share of the ETF market. This situation has caused many investors to worry whether the interest of institutional investors is gradually waning. Nevertheless, some industry experts still believe that the outflow of funds may only be a temporary phenomenon. After all, the long-term prospects of Bitcoin are still optimistic by many institutions.
Bitcoin price fluctuations
Despite the concerns about capital outflows, Bitcoin prices seem to be recovering after a short-term shock. Bitcoin once fell to $92,710, but the price has now rebounded to $97,325.68, up 3% in the past 24 hours. However, despite the price recovery, the market's trading volume has fallen by 52.03% to $59.51 billion, in stark contrast to the market when it hit an all-time high in November.
Shift in institutional preferences
Market uncertainty and macroeconomic factors may be the main reasons for the recent outflow of funds. Despite this, some institutional investors still have firm confidence in Bitcoin. Business intelligence company MicroStrategy continues its Bitcoin accumulation strategy and further expands its Bitcoin reserves. This shows that despite the volatility of market sentiment, there are still institutions that are optimistic about the future potential of Bitcoin.
As for other macroeconomic factors, analysts generally believe that the Fed's recent interest rate cuts and future uncertainties have had a wide-ranging impact on financial markets, not just in the cryptocurrency space. Despite this, analysts remain optimistic that Bitcoin and the spot Bitcoin ETF market will gradually rebound in the future.
Hopes of a market rebound
Nate Geraci, president of ETF Store, provided an interesting insight into the ETF market on X. He noted that despite short-term outflows, Grayscale Bitcoin Trust (GBTC) and Hashdex Bitcoin ETF (DEFI), which have performed well year-to-date, remain at the top of the ETF market with year-to-date growth rates of 147.21% and 116.62%, respectively.
Overall, although the recent capital outflow has attracted widespread attention in the market, short-term turbulence does not mean that there is a problem with Bitcoin's long-term prospects. For investors, market uncertainty may bring volatility, but it also hides many opportunities. As we can see, some large institutions are still firmly optimistic about Bitcoin and are expected to continue to increase their holdings in the future.
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