IBIT suffers biggest pullback in two months amid BTC volatility
BlackRock’s iShares Bitcoin Trust (IBIT) experienced its largest single-day outflow since May, shedding $292.5 million on Monday following a weekend drop in Bitcoin prices.
The outflow came just days after a minor Friday pullback, which snapped a 37-day inflow streak. Bitcoin had dropped as much as 8.5% from its July 14 all-time high, bottoming at $112,300 before recovering slightly to $115,000 by late Monday. Despite the recent setback, BlackRock’s ETF still recorded a net $5.2 billion inflow in July, representing 9% of total inflows since the fund’s January 2024 launch. Monday marked the third consecutive day of net selling across US-listed spot Bitcoin ETFs, though outflows appear to be slowing as Bitcoin stabilizes.
Digital Assets and Hedge Funds Gain as Private Markets Cool
Despite recent ETF outflows, the broader digital asset investment landscape remains strong. Bloomberg ETF analyst Eric Balchunas noted that capital flows are shifting within the alternatives space, with digital assets and hedge funds gaining market share at the expense of private equity and credit. JPMorgan strategist Nikolaos Panigirtzoglou echoed the sentiment, stating that fundraising for digital asset products has sharply accelerated.
Through July 22, the sector attracted $60 billion in inflows, closing in on the record $85 billion recorded in all of 2024. These figures suggest that institutional investors continue to see value in crypto despite short-term volatility, particularly as BTC becomes a more accepted component of diversified portfolios.
ETFs Help Reduce Bitcoin Volatility, Attract Institutional Interest
A silver lining to the recent ETF flows is the significant drop in Bitcoin volatility since the launch of spot ETFs earlier this year. According to Balchunas, the 90-day rolling volatility for BlackRock’s IBIT has fallen below 40 for the first time, down from above 60 in January. This stabilization is making Bitcoin more appealing to institutional investors, who generally avoid highly volatile assets.
Balchunas noted that the lack of “vomit-inducing drawdowns” could help Bitcoin gain legitimacy as a currency and store of value, especially as macro conditions and regulatory clarity evolve. With ETF products cushioning volatility and sustained long-term inflows, Bitcoin may be entering a more mature phase of adoption—even amid periodic pullbacks.
Recently we wrote that crypto inflows saw a dramatic reversal this past week, dropping from a promising $883 million in the early part of the week to just $223 million by the end of the week.
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