Bitcoin Bloodbath: BlackRock's Fund Bleeds $420M in Single Day
BlackRock's Bitcoin fund has seen a significant outflow of $420 million in a single day, marking the seventh consecutive day of losses for the fund. This massive outflow comes as Bitcoin prices have plummeted to yearly lows, with the cryptocurrency losing more than 25% of its value since its all-time high in December 2021.
The BlackRockSHYM-- iShares Bitcoin Trust (IBIT) shed 5,000 BTC on February 26, its largest outflow to date, surpassing the $332 million it lost on January 2. This outflow follows a record day of bleeding from the products on February 24, when more than $1.1 billion exited on aggregate. The seven-day outflow streak has seen almost $3 billion exiting the products, bringing the day's total outflow to $756 million.
Nate Geraci, president of ETF Store, believes that this outflow is a "shorter-term blip" and not a long-term trend. However, the Fidelity Wise Origin Bitcoin Fund (FBTC) also saw a seven-day outflow streak, with a further $145.7 million exiting the product on February 26. Other Bitcoin ETFs, such as those offered by Bitwise, Ark 21Shares, InvescoGTOS--, Franklin, WisdomTreeQIG--, and Grayscale, also saw outflows ranging between $10 million and $60 million.
Crypto markets have extended their losses, with total capitalization falling a further 5.6% on the day to $2.9 trillion. Bitcoin dumped to a low of $82,455 on February 26, marking a significant correction in the market. Despite the correction, CryptoQuant founder and CEO Ki Young Ju advised against "panic selling," noting that a 30% correction in a Bitcoin bull cycle is common.
Analysts and industry experts, such as BitMEX co-founder Arthur Hayes and 10x Research head of research Markus Thielen, suggest that the majority of Bitcoin ETF investors are hedge funds seeking arbitrage yields, not long-term BTC investors. As these yield opportunities dry up, these investors are unwinding their positions, contributing to the outflow from spot ETFs.
Hayes predicted that BTC would dump to $70,000 on the continued outflow 
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