Blackrock’s iShares bitcoin fund sees record exodus as crypto heads for worst month since 2022

location of blackrock bitcoin The exchange-traded fund is having its worst month ever as its underlying asset suffers its biggest monthly decline in more than three years.

FactSet data shows the iShares Bitcoin Trust ETF recorded $2.2 billion in outflows this month as of Monday. That’s almost eight times the $291 million loss the investment vehicle suffered last October, the second-worst month on record since its launch at the beginning of 2024.

Outflows come as Bitcoin bleeds. The digital asset was last traded at $87,907.10 It has fallen more than 20 percent in the past month and is down more than 40 percent from its peak just north of $126,000 in early October. This makes November Bitcoin’s worst month since June 2022, when the asset’s price fell nearly 39%.

“There is no question that there has been significant outflow from hot money investments,” Jay Hatfield, CEO and portfolio manager at Infrastructure Capital Advisors, told CNBC.

But “the pullback is really focused on the gambling part of the market… and Bitcoin is really the poster child for that,” he said.

Investors are exiting the Blackrock fund to move into risk-averse assets such as gold amid rising economic uncertainties and signs of worsening market sentiment.

A recent survey from the University of Michigan showed that consumer confidence has fallen to near record lows. Meanwhile, investors await key data from September retail sales and producer price index reports to be released on Tuesday. And meanwhile CME FedWatch Tool It shows that traders are pricing in an over 80% chance that the Fed will cut interest rates at its December meeting, although such a cut is far from a certainty.

Amidst all the uncertainty, Bitcoin is bleeding. Frank Chaparro, head of content and special projects at crypto-focused trading firm GSR, told CNBC that spot bitcoin ETF investors, especially new owners, are feeling pressure to sell their shares, which could increase the asset’s downside in the near term.

“As the uncertainty of the macro environment decreases, investors tend to reduce risks across assets, which often means reducing exposure to crypto and other risk-sensitive stocks,” Chaparro said. he said. “And for new entrants coming through funds, any crisis can be disruptive; they may sell as quickly as they buy.”

But while it’s true that spot Bitcoin ETFs have brought in a host of new retail investors who may be hesitant in volatile times, the funds have also attracted a number of long-term investors, such as institutions, that can withstand the crisis, Joshua Levine, president of Bitcoin treasury firm OranjeBTC, told CNBC.

Levine said this institutional base could “mitigate some of the extreme downside, but also moderate the upside, reducing Bitcoin’s volatility as the asset class matures.”