BlackRock's spot Bitcoin ETF, IBIT, has halted inflows for the first time since its launch, raising concerns within the crypto community. IBIT's 71-day inflow streak ended abruptly on April 24th, with the fund's holdings remaining unchanged at 274,462 BTC over the past four trading days. While some observers speculate that this may indicate a shift in investor sentiment, others argue that zero inflows are not uncommon in ETFs and that IBIT's previous inflow streak was an exception rather than the norm.
BlackRock's Bitcoin ETF Halt Raises Concerns Amidst Market Outflows
The Bitcoin (BTC) community is grappling with mounting apprehensions as BlackRock's spot Bitcoin exchange-traded fund (ETF), iShares Bitcoin Trust (IBIT), breaks its 71-day inflow streak for the first time since its inception. This unprecedented halt has sent shockwaves through the industry, sparking concerns about the fund's future and the broader Bitcoin ETF landscape.
Since April 24th, IBIT, the fastest-growing spot Bitcoin ETF in the United States, has remained stagnant at 274,462 BTC, with no new inflows recorded. This abrupt pause has raised eyebrows among crypto observers, who see it as a potential red flag for investors.
"Typically, for new Bitcoins to enter or leave an ETF, there needs to be a substantial mismatch between supply and demand, necessitating the creation or destruction of creation units by market makers," explains Thomas Fahrer, Apollo co-founder, in a recent statement. "This is not unique to Bitcoin ETFs but is characteristic of ETFs in general. However, BlackRock's consistent positive inflows have been an exception to this rule, making the recent halt noteworthy."
Compounding these concerns is the broader market trend of declining inflows into spot Bitcoin ETFs. Outflows from Grayscale Investments, the largest seller of these funds, have continued unabated. According to HODL Capital data, on April 20th, the total daily outflows from 10 spot Bitcoin ETFs in the United States reached 823 BTC.
As of that day, Grayscale's Bitcoin Trust ETF (GBTC) held 297,117 BTC, a significant 52% decline since its initial holdings on January 11th. This places Grayscale's GBTC only around 8% ahead of BlackRock's IBIT, which currently holds 274,462 BTC.
Despite the slowdown in spot Bitcoin ETF inflows, the overall holdings of these funds remain in positive territory. As of April 29th, the total BTC ETF holdings stood at an impressive 831,424 BTC, representing a healthy 33.1% increase since January 11th.
While this growth is encouraging, the halts in inflows and the broader market outflows have cast a shadow over the Bitcoin ETF market. Industry experts are closely monitoring the situation, eager to assess the long-term implications for both IBIT and the wider Bitcoin ETF ecosystem.
