In a significant development in the cryptocurrency market, BlackRock’s iShares Bitcoin Trust (IBIT) recorded its largest daily net inflow in over a month, signalling continued investor confidence even as Bitcoin’s recent rally showed signs of cooling. The surge in investment comes as Bitcoin’s price briefly dipped below $64,000 after a robust weekly performance.
BlackRock’s IBIT ETF Sees Major Inflow Amid Bitcoin Price Dip
On August 26, BlackRock’s iShares Bitcoin Trust ETF (IBIT) recorded a notable $224.1 million in net inflows, marking its most substantial daily inflow since July 22. This surge in investment activity coincided with Bitcoin’s price retreating from its recent highs, providing a strategic entry point for investors. The last time the IBIT ETF saw such significant inflows was when it attracted $526.7 million on July 22, as Bitcoin reached a daily peak of $67,534.
Bitcoin’s price experienced a nearly 2% drop in the last 24 hours, falling from a daily high of $64,121 to $63,031. This decline followed a strong weekly rally that saw Bitcoin climb from a seven-day low of $58,756 to a high of $64,475 on August 25, the highest level since early August. The inflows into the IBIT ETF are indicative of investor confidence in Bitcoin’s long-term potential, even amid short-term price fluctuations.
Broader Market Impact: Bitcoin ETFs and Beyond
The inflows into BlackRock’s IBIT ETF significantly impacted the broader market for Bitcoin ETFs in the United States. On the same day, the 11 U.S.-based spot Bitcoin ETFs collectively recorded a net inflow of $202.6 million. While BlackRock’s IBIT led the charge, other Bitcoin ETFs, including those from issuers like Bitwise, Fidelity, and VanEck, experienced net outflows totaling $32.1 million.
Two other Bitcoin ETFs, the Franklin Bitcoin ETF (EZBC) and the WisdomTree Bitcoin Fund (BTCW), also saw positive net inflows, albeit at a smaller scale, with $5.5 million and $5.1 million, respectively. However, the U.S.-based Ether ETFs did not fare as well, recording joint net outflows of $13.2 million as Ethereum’s price dipped 2.22% to $2,686.
IBIT’s Dominance and Market Sentiment
The dominance of IBIT’s inflows comes on the heels of a strong performance in the global crypto investment product market. For the week ending August 23, IBIT led global crypto investment products, contributing to the highest weekly inflows in the past five weeks. Bitcoin investment products, in particular, attracted $543 million in inflows, with IBIT accounting for $318 million, the largest share of any crypto investment product.
Market sentiment has been buoyed by growing anticipation of potential interest rate cuts by the U.S. Federal Reserve. This expectation was fueled by remarks from Federal Reserve Chair Jerome Powell on August 21, suggesting that rate cuts could occur as early as September. The possibility of lower interest rates has made Bitcoin and other crypto assets more attractive to investors, leading to increased demand for Bitcoin ETFs like IBIT.