BlackRock IBIT investors turn negative after sell-off

Aggregate investor returns in BlackRock’s iShares Bitcoin Trust have slipped into negative territory after Bitcoin’s recent sell-off erased dollar-weighted gains.

Based on dollar-weighted flows, the average dollar invested in IBIT is now underwater following Bitcoin’s fall into the mid-$70,000 range.

Bob Elliott, chief investment officer at Unlimited Funds, said heavier inflows at higher prices have dragged cumulative dollar-weighted returns below zero despite early investors remaining in profit.

IBIT’s dollar-weighted returns previously peaked near $35 billion in October when Bitcoin was trading at record highs, before recent losses wiped out those gains on an aggregate basis.

The deterioration has coincided with accelerating outflows from Bitcoin investment products, with nearly $1.1 billion withdrawn from Bitcoin funds in the week to January 25, according to CoinShares.

“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,”

CoinShares said.

Despite Bitcoin’s pullback, gold has continued to attract flows and recently hit record highs above $5,400 per troy ounce, highlighting the contrast with crypto’s faltering inflation-hedge narrative.

At the time of reporting, Bitcoin price was $77,257.24.