IBIT, the largest spot bitcoin ETF, has attracted strong investor demand since its launch in January 2024 and has played a central role in the rise of crypto ETFs. The fund’s outflow underlines the severity of bitcoin’s sell-off, which has corrected sharply after hitting a record high in October, and underlines how deep the pullback has been in risk assets. Gold, on the other hand, has remained resilient, calling into question bitcoin’s status as a hedge or as a replacement for the yellow metal. Some analysts have said the moves indicate investors are trading their exposure to bitcoin for gold.
“The crypto market suffered a hangover in August,” said Kraken’s Global Economist Thomas Perfumo, adding that much of that demand was driven by borrowed money. “The momentum apparently peaked over the summer. But the truth is, this hangover trend started months ago,” he added. Analysts have also pointed to profit-taking by long-term shareholders and increasing caution among bitcoin treasury companies, which had ramped up their purchases earlier this year.“Bitcoin treasury companies have purchased nearly $50 billion worth of bitcoin over the past year. Recently, many of these companies have begun trading at a discount to net asset value, weighing on near-term market expectations for net new bitcoin purchases by these companies,” said Brian Vieten, research analyst at Siebert Financial.
This shift comes at a time when several heavyweight investors have expressed concerns about the inflated valuations of various asset classes.
“A continued lack of speculative minds is weighing on bitcoin,” said Jose Torres, senior economist at Interactive Brokers.
IBIT, which has more than $73 billion in assets, is down 19% so far this quarter
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