to leave a comment.
▲ Bitcoin (BTC) Exchange Traded Fund (ETF) ©CoinReaders
In the spot Bitcoin (BTC) ETF market, BlackRock's IBIT recorded an unprecedented outflow of funds, causing institutional investor sentiment to rapidly cool. With geopolitical risks in the Middle East and concerns about US monetary tightening overlapping, BTC eventually fell below $73,000, and warnings are growing in the market that “the exodus of institutional funds could lead to further declines.”
According to the investment media TradingNews on May 28 (local time), BlackRock's iShares Bitcoin Trust ETF (IBIT) recorded a net outflow of $527.84 million in one day. This is the second-largest single-day outflow since the ETF's launch in 2024. On the same day, a total of $733.43 million flowed out from all 11 US spot Bitcoin ETF products, and BTC fell to between $72,842 and $72,978 during intraday trading. The media analyzed that risk aversion sentiment rapidly expanded as geopolitical tensions heightened again after the US airstrikes on Iranian military facilities near the Strait of Hormuz.
A clear movement of institutional investors reducing their positions was also observed. A dark pool block sale of $1.29 billion occurred in IBIT the day before, followed by large-scale redemptions. The media evaluated that while block trades themselves are not the same concept as ETF net outflows, the continuous flow of large-scale trades indicates institutional investors' shift to defensive positions. In particular, it explained that institutional investor sentiment is rapidly cooling, with over $2 billion in cumulative fund outflows occurring in the spot Bitcoin ETF market over the past two weeks.
The current market atmosphere is completely different from April, according to evaluations. At that time, the spot Bitcoin ETF market showed strong institutional buying, recording a net inflow of approximately $2.44 billion over a month, but in May, it sharply reversed to a cumulative net outflow of up to $2.07 billion. The media diagnosed that the re-acceleration of US inflation, the hawkish stance of the US Federal Reserve (Fed), and the expansion of Middle East risks are the key backgrounds that reversed institutional fund flows. It particularly explained that due to the structure of spot ETFs, when investor redemptions occur, fund managers must actually sell BTC, thus creating a vicious cycle where fund outflows further accelerate the decline in BTC prices.
However, there is also an analysis that long-term institutional demand itself has not completely collapsed. IBIT still holds assets worth approximately $59 billion to $64 billion, accounting for about 4% of the total BTC supply. Furthermore, continuous fund inflows into Solana (SOL) spot ETFs suggest that institutional investors are not leaving the cryptocurrency market entirely but are rather adjusting their risk exposure in the short term. The media identified IBIT's daily fund flow, US interest rate policy, and Middle East geopolitical risks as key variables that will determine the future direction of the market.
*Disclaimer: This article is for investment reference only and is not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*
Newsletter
Get key news delivered to your email every morning
to leave a comment.