The aggregate investor position in the largest spot Bitcoin ETF is now likely in the red following Bitcoin’s sharp weekend decline. Analysis indicates the average dollar invested in BlackRock’s iShares Bitcoin Trust (IBIT) is underwater, erasing cumulative gains on a dollar-weighted basis. This shift coincides with accelerating outflows from crypto investment products, which saw $1.73 billion withdrawn in a single week.
Bitcoin’s sharp decline has likely pushed the aggregate investor position in the largest spot Bitcoin exchange-traded fund into negative territory. According to Bob Elliott, chief investment officer at asset manager Unlimited Funds, the average dollar invested in BlackRock’s iShares Bitcoin Trust (IBIT) is now underwater.
The data suggest heavier inflows at higher price levels have pulled overall dollar-weighted returns below zero. By comparison, IBIT’s dollar-weighted returns peaked at roughly $35 billion last October when Bitcoin traded at record highs.
Independent data shows IBIT’s net asset value has declined in recent weeks, aligning with the broader Bitcoin sell-off. This deterioration is unfolding alongside a broader pullback from crypto investment products.
In the week to Jan. 25, digital asset investment products recorded nearly $1.1 billion in outflows from Bitcoin funds alone. Total crypto fund outflows reached $1.73 billion, which was the largest weekly withdrawal since mid-November, according to CoinShares.
CoinShares stated “Dwindling expectations for interest rate cuts, negative price momentum and disappointment that digital assets have not participated in the debasement trade yet have likely fuelled these outflows.” The “debasement trade” refers to positioning in assets expected to preserve value amid inflation and currency dilution.
Bitcoin has yet to attract those flows to the same extent as gold, which recently reached record highs. Despite a recent pullback, gold has remained in a sustained uptrend for more than a year.
