The seemingly unstoppable momentum behind BlackRock’s Bitcoin ETF slammed into reverse last week. Dramatically, the iShares Bitcoin Trust (IBIT) ended its remarkable 31-day inflow streak. It recorded its largest single-day outflow ever on May 30th. This sudden shift sent ripples through the cryptocurrency investment landscape. Investors pulled a staggering $430.8 million out of IBIT that day. Consequently, this shattered its previous outflow record set back in February. That earlier exit was $418.1 million. Farside Investors provided this definitive data.
Historic Inflow Run Comes to a Close
For over a month, IBIT consistently attracted new investor money. This impressive 31-day streak included only three days with zero flows. Ultimately, it cemented May 2024 as the fund’s best month ever. IBIT pulled in a colossal $6.22 billion during May alone. Since its January launch, the fund has become a dominant force. Presently, IBIT manages approximately $70 billion worth of Bitcoin. ETF analyst Nate Geraci expressed amazement on social media. “What a run over the past 30+ days, though,” Geraci posted on May 31st. Furthermore, he called the scale “ridiculous.”
Market-Wide Retreat
BlackRock’s outflow wasn’t isolated. Simultaneously, the entire US spot Bitcoin ETF sector faced heavy withdrawals. Overall, the eleven funds suffered net outflows for two consecutive days. On May 30th, total outflows hit $616.1 million across all providers. This followed a significant $358.6 million exit just the day before. The sector ended its own 10-day inflow streak on May 29th. Interestingly, BlackRock bucked the trend that previous day. It still managed a positive inflow on May 29th. This resilience drew industry attention. Master Ventures founder Kyle Chasse noted the contrast. “Every other issuer saw red. BlackRock kept buying…big brain energy right there,” Chasse observed.
Analysts Views on this Shift
Despite the large withdrawals, experts downplayed retail investor fear. Chasse offered a different perspective. “The sell-off isn’t retail panic,” he asserted firmly. “It’s literally the quiet transfer of supply to the strongest hands,” he explained. This view suggests sophisticated players are repositioning. Bloomberg analyst Eric Balchunas supported this institutional focus. He noted IBIT captured over 100% of recent net inflows before the exit. Therefore, institutional activity clearly drove the prior rally. The outflow coincided with market jitters. Specifically, renewed U.S.-China trade tensions over tariffs emerged as a factor. Bitcoin’s price dipped 1.1% on May 30th, trading around $104,735.
Puzzling Price Disconnect
A key market puzzle persists. Despite massive ETF inflows, Bitcoin’s price hasn’t surged proportionally. Derive founder Nick Forster highlighted this anomaly. “Despite significant inflows…Bitcoin’s price hasn’t experienced a commensurate rise,” Forster stated clearly. For instance, IBIT absorbed over $6.2 billion in May alone. Furthermore, spot Bitcoin ETFs collectively gained $2.75 billion just the week ending May 23rd. Yet Bitcoin traded near $103,700 on May 31st, down 2.27% daily. Trading volumes remained high, however, hitting $5.39 billion on May 30th. This easily surpassed the 20-day average of $2.81 billion.
IBIT Dominance
BlackRock’s fund remains the undisputed leader. IBIT holds a commanding position among spot Bitcoin ETFs. It boasts $69.2 billion in assets under management currently. This figure triples Fidelity’s FBTC, its closest competitor. Moreover, IBIT holds approximately 3.33% of all circulating Bitcoin. It also dominates trading volume, capturing roughly 80% of Bitcoin ETF activity. Since its January inception, IBIT has secured net inflows totalling $44.35 billion. Its treasury holds an impressive 625,000 BTC. Analysts believe this institutional foundation provides long-term price support. Nevertheless, May’s massive inflows without proportional price gains raise questions. The record outflow now signals a potential shift in sentiment, possibly driven by macrofears or profit-taking after Bitcoin’s rally. However, IBIT’s fundamental strength suggests this is likely a pause, not a collapse.
Written By Fazal Ul Vahab C H
