In a surprising turn of events, BlackRock’s iShares Bitcoin Trust (IBIT) experienced a significant outflow of $332.6 million on January 2, marking its largest withdrawal since its inception. This massive outflow followed the reopening of U.S. markets after the New Year’s Day holiday, extending a three-day streak of redemptions. The total outflows for the week amounted to a staggering $392.6 million, surpassing the previous record of $188.7 million set on December 24.
Despite these daunting figures, BlackRock’s Bitcoin ETF continues to be a dominant force in the U.S. market. In 2024, it ranked third among all U.S.-listed ETFs in terms of net inflows, securing a remarkable $37.2 billion. This achievement placed it behind only Vanguard’s 500 Index Fund and the iShares Core S&P 500 ETF.
Future Prospects: A Revival in Inflows Predicted
Renowned crypto analyst Adam Back forecasts a resurgence in Bitcoin ETF inflows by 2025, particularly if Bitcoin prices rise as anticipated. However, he warns of potential corrections on the horizon. Such fluctuations are considered a normal phase for Bitcoin before reaching new all-time highs.
Competing ETFs See Gains
The significant outflows from BlackRock’s ETF exerted downward pressure on the U.S. spot Bitcoin ETF market, despite competitors like Bitwise, Fidelity, and Ark 21Shares reporting inflows of $48.3 million, $36.2 million, and $16.5 million, respectively, on January 2. Grayscale’s Bitcoin Mini Trust also saw an inflow of $6.9 million, although its flagship GBTC fund experienced a $23.1 million outflow.
Across the broader crypto ETF market, there were $242 million in outflows on that day, with BlackRock’s losses overshadowing the gains by other funds. While large outflows may suggest negative sentiment around ETFs, they could also indicate that investors are rebalancing their portfolios or capitalizing on profits. Meanwhile, Ethereum ETFs demonstrated strong performance, with BlackRock and Fidelity leading in inflows for Ether-focused funds. Grayscale’s Ethereum Mini Trust and Bitwise’s Ethereum ETF added significant contributions.
Crypto ETFs’ 2024 Success
Despite recent setbacks, 2024 proved to be a landmark year for U.S. spot Bitcoin ETFs, achieving over $35 billion in net inflows. BlackRock led the charge with $37.31 billion, followed by Fidelity and ARK’s Bitcoin ETFs. These figures far exceeded initial industry expectations, solidifying the growing popularity of crypto ETFs among investors.
Ethereum ETFs also enjoyed significant success, with BlackRock and Fidelity spearheading inflows for Ether-focused funds. Grayscale’s Ethereum Mini Trust and Bitwise’s Ethereum ETF made notable contributions to this success.
Predictions for 2025: A Bright Future for Crypto ETFs
Looking forward, many industry experts, including Nate Geraci, anticipate continued innovation in 2025, with the potential introduction of combined Bitcoin and ETH ETFs, along with Solana ETFs. As the market prepares for an anticipated bull run, new opportunities for growth and diversification in the crypto ETF space seem on the horizon.
As the crypto ETF landscape evolves, investors and analysts alike remain watchful, eager to see how these developments will unfold in the coming years.
