BlackRock's Bitcoin ETF (IBIT) Reports Largest Outflow Yet, Market Observers Say It Could Be Year-End Portfolio Adjustments

BlackRock's iShares Bitcoin Trust ETF (IBIT), the largest publicly traded fund tracking Bitcoin, has reported its largest outflow yet since its launch almost a year ago.

The largest Bitcoin exchange-traded fund (ETF) saw its biggest outflow yet on Thursday, as investors pulled a net $332 million from the fund, the latest in a string of outflows that began in December.

BlackRock's iShares Bitcoin Trust ETF (NYSE:IBIT) saw investors withdraw the funds on Thursday, according to Bloomberg data. The outflow marks the largest single-day pullout from the ETF since its launch nearly one year ago.

Previously, the largest outflow from IBIT occurred in mid-December, when investors pulled $188 million from the fund. At the time, Bitcoin was trading near all-time highs around $108,315.

Since then, Bitcoin has fallen to around $95,000, and IBIT has seen three consecutive days of outflows, its longest losing streak since its inception.

The outflows from IBIT are part of a larger trend among U.S. Bitcoin ETFs, which have seen outflows of about $2 billion since Dec. 19.

Additionally, the open interest of Bitcoin futures contracts on the Chicago Mercantile Exchange has decreased by nearly 20% from its peak last month.

Some market observers have attributed these outflows to institutional investors making year-end portfolio adjustments or reducing risk.

Despite the recent outflows, IBIT remains the largest Bitcoin ETF, holding about 552,000 BTC or over $51 billion in assets.

The fund had a stellar performance in 2024, ranking third on Bloomberg's ETF leaderboard with a year-to-date inflow of $37 billion, behind only the two behemoths in the space: the VOO and IVV index funds.

While some may perceive these outflows as an indication of a lack of confidence in the market, others point to the common practice of rebalancing within portfolios, which may be factoring into the trend.

It remains to be seen whether the outflows will continue in the near term and if the investment trust will be able to regain the confidence of its investors.