BlackRock Bitcoin Trust Faces Record Outflows Amid Market Decline

Investors have pulled an unprecedented $420 million from BlackRock’s iShares Bitcoin Trust, marking its largest single-day outflow as Bitcoin hit a yearly low.

The sharp drop in the fund’s holdings, which saw 5,000 BTC exit on February 26, overshadowed earlier withdrawals, including a $332 million pullback in January.

This massive outflow is part of a broader trend, with nearly $3 billion leaving the market over the past week. February 26 alone accounted for $756 million in total withdrawals, according to CoinGlass data. Despite the wave of red, ETF Store President Nate Geraci believes this could be a short-term dip, and the trend might not persist.

The pullback isn’t limited to BlackRock’s fund. Other Bitcoin-focused investment products also experienced significant losses, including Fidelity’s Wise Origin Bitcoin Fund, which saw a $145.7 million exit. Many others, including Grayscale and WisdomTree, reported outflows ranging from $10 million to $60 million.

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Meanwhile, the broader crypto market continued its decline, with Bitcoin dropping to $82,455 on February 26 and the total market capitalization sinking below $3 trillion. This marks a 25% correction from December’s all-time highs, with approximately $1 trillion leaving the space.

Despite the market’s struggles, some analysts, including CryptoQuant’s Ki Young Ju, caution against panic. He pointed out that Bitcoin’s past performance shows that large corrections are not unusual during bull cycles, referencing a 53% drop in 2021. Others, like BitMEX’s Arthur Hayes, suggest the outflows are driven by hedge funds unwinding short-term positions, with many investors looking to capitalize on arbitrage opportunities rather than holding Bitcoin for the long haul. Hayes speculated that Bitcoin could fall as low as $70,000 due to the continued withdrawals.

Alexander Stefanov

With over 8 years of experience in the cryptocurrency and blockchain industry, Alexander is a seasoned content creator and market analyst dedicated to making digital assets more accessible and understandable. He specializes in breaking down complex crypto trends, analyzing market movements, and producing insightful content aimed at educating both newcomers and seasoned investors. Alexander has built a reputation for delivering timely and accurate analysis, while keeping a close eye on regulatory developments, emerging technologies, and macroeconomic trends that shape the future of digital finance. His work is rooted in a passion for innovation and a firm belief that widespread education is key to accelerating global crypto adoption.