BlackRock Bitcoin ETF Faces First Daily Outflow — Should You Panic?

BlackRock Bitcoin ETF
BlackRock Bitcoin ETF

YEREVAN ( — For the first time since its launch, BlackRock’s Bitcoin ETF, dubbed iShares Bitcoin Trust (IBIT)m experienced $36.9 million in outflows on May 1. The timing of these outflows coincides with a general decline in cryptocurrency values, which saw Bitcoin’s price tumble over recent weeks.

Notably, the outflows occurred against the backdrop of the Federal Reserve’s decision to keep interest rates higher for longer, responding to the slowdown in the U.S. gross domestic product (GDP) in Q1 2024 and persistent inflation.

Spot Bitcoin ETF net flows
Spot Bitcoin ETF net flows. Source: Glassnode

Other Bitcoin ETFs Follow Suit

The same trend was observed across other Bitcoin ETFs. Combined, they experienced a substantial total outflow of $526.8 million.

Notably, while most funds saw reductions, the Hashdex Bitcoin ETF maintained a stable flow. The Fidelity Wise Origin Bitcoin Fund was the hardest hit, seeing $191.1 million in outflows, followed by the Grayscale Bitcoin Trust, which lost $167.4 million.

Spot Bitcoin ETF flows since April 24. Source: Farside Investors
Spot Bitcoin ETF flows since April 24. Source: Farside Investors

Outflows Normal — DONT PANIC!

ETF analysts, including James Seyffart from Bloomberg, reassure that these outflows are a normal part of ETF operations and don’t necessarily signal long-term problems. ETFs are designed to manage inflows and outflows efficiently, ensuring market stability even in volatile periods.

ETF Stability Assurance by James Seyffart - Twitter
Source: X

In contrast, gold ETFs present a different scenario. Despite significant outflows—$1 billion from iShares and $3 billion from SPDR Gold ETFs—gold’s value has increased by 16% this year. Nate Geraci, President of The ETF Store, pointed out on social media that these movements are typical for ETFs, as they don’t always correlate directly with asset performance.

Source: Nate Geraci
Source: X

This analysis provides a deeper understanding of current investment trends in both digital and traditional assets. It highlights how investor sentiments can diverge in different markets, underscoring the unique dynamics of Bitcoin compared to traditional safe-haven assets like gold.

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