Bitcoin Under Pressure: BlackRock’s IBIT a Victim of Its Own Success
BTC continues to spread panic among crypto investors. BlackRock’s Bitcoin ETF IBIT, long seen as a safe vehicle for exposure to digital assets, now shows a negative average return. A sharp turnaround that highlights the fragility of institutional flows in an still unstable crypto market.
In brief
- Bitcoin’s fall has pushed BlackRock’s IBIT ETF into negative territory.
- Investors flee crypto funds, disappointed by BTC’s failure as a safe haven.
IBIT in the red: Bitcoin erases investor gains
Since the end of January, the dollar-weighted returns of BlackRock’s Bitcoin ETF have fallen below zero. This is despite an historic peak of 35 billion dollars in cumulative gains in October.
This turnaround is explained by the massive arrival of capital at very high levels. Investors who entered at the peak are now facing heavy losses. Specifically, the average BTC price paid by IBIT holders is now higher than the current price.
This situation reflects the high sensitivity of Bitcoin ETFs to market movements. In just a few days, the asset management of the ETF found itself trapped by the timing of fund entries.
Capital Outflow: Bitcoin Fails as a Safe Haven
The week of January 25 saw 1.1 billion dollars exit BTC funds, out of a total of 1.73 billion dollars of outflows for the entire crypto sector. According to the data, this rout mainly affects American investors.
More worryingly, Bitcoin fails to convince as a safe haven. Faced with inflation, markets expected behavior similar to gold. But while the yellow metal flirts with all-time highs (over $5,400 an ounce), BTC struggles to find new momentum.
The expected drop in interest rates was not enough to reverse the trend. Confidence wavers, including among institutional investors, who were actually driving the spectacular early growth of IBIT. This disenchantment raises a real question about Bitcoin’s ability to stabilize its position in long-term portfolios.
In any case, the IBIT case reminds us that even the best-marketed products remain vulnerable in an unpredictable crypto market. While gold reassures, Bitcoin divides more than ever. It remains to be seen whether this correction will become an opportunity or a lasting warning signal.
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My name is Ariela, and I am 31 years old. I have been working in the field of web writing for 7 years now. I only discovered trading and cryptocurrency a few years ago, but it is a universe that greatly interests me. The topics covered on the platform allow me to learn more. A singer in my spare time, I also cultivate a great passion for music and reading (and animals!)
The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.