Bitcoin slump triggers record outflows from BlackRock’s IBIT ETF

Bitcoin traded near $91,230 at 7:32 a.m. in London on Tuesday and is down almost 30% from an October record, reaching the lowest level since April. Prices fell below levels where holders of the 12 US spot Bitcoin ETFs were collectively in profit. Across those funds, investors have withdrawn more than $3 billion this month, with nearly $2 billion coming from the BlackRock vehicle.

IBIT is the largest US spot Bitcoin ETF, with more than $72 billion in assets and roughly $26 billion of inflows this year. BlackRock did not immediately provide comment on the latest redemptions.

“ETF outflows combined with long-term holder sales have tightened market liquidity, pushing short-term Bitcoin prices lower and highlighting weakening market confidence,” according to Dilin Wu, a research strategist at Pepperstone.

Options positioning has turned defensive, according to Sean Dawson, head of research at Derive.xyz. “A significant number of traders are buying downside protection against Bitcoin hitting $80,000 by Dec. 26. With ongoing concerns about the resilience of the US job market and the probability of a December rate cut slipping to barely above a coin-toss, there’s very little in the macro backdrop giving traders a reason to stay bullish into the close of the year.”

The latest slide follows an October 10 selloff that erased about $73 billion in leveraged positions, putting pressure on liquidity across crypto markets.As we reported earlier, October ended with about $3.61 billion of net inflows into US spot Bitcoin ETFs even as prices softened. Trading volumes rose to roughly $133.45 billion from September’s $72.91 billion. IBIT took in an estimated $4.08 billion, handled about $95.6 billion of turnover, and finished the month near $85.7 billion in assets, around 59% of the group, while shares traded near net asset value at a discount of about 0.33%.