Bitcoin ETFs See $1.1B Outflow as BlackRock Buys Directly
U.S. spot Bitcoin ETFs experienced $1.1 billion in net outflows over three days, with BlackRock's IBIT leading redemptions at $368 million. Despite the ETF deleveraging, BlackRock reportedly bought $1.027 billion of Bitcoin and Ether directly for client accounts, signaling a potential rotation from public ETFs to direct custody. This emerging "flow war" complicates market analysis, suggesting institutional conviction remains but is shifting toward alternative or direct exposure vehicles.
- U.S. spot Bitcoin ETFs have experienced five consecutive weeks of net outflows, totaling approximately $3.8 billion. The most significant weekly withdrawal during this period occurred in the week ending January 30th, with a net outflow of about $1.49 billion. - Despite recent redemptions, cumulative net inflows into U.S. spot Bitcoin ETFs since their inception still stand at a substantial $54.01 billion, with total net assets around $85.31 billion. This figure peaked at $63 billion in October 2025 before Bitcoin's price retreated from its all-time high. - The outflows are not uniform across all funds; Grayscale's converted GBTC fund has consistently seen significant outflows, a portion of which is attributed to its higher expense ratio of 1.5% compared to newer, more affordable spot Bitcoin ETFs. - The recent withdrawals from spot Bitcoin ETFs are thought to be linked to institutional de-risking due to geopolitical tensions and macroeconomic uncertainty, rather than a decline in long-term interest in the asset class. - Beyond ETFs, a survey of institutional investors revealed that 60% prefer to gain crypto exposure through regulated vehicles where cryptocurrency is the underlying asset, as opposed to direct holdings (29%). - BlackRock has been actively purchasing cryptocurrencies for its clients outside of its ETF products. For instance, on May 29, 2025, the firm bought 1,160 Bitcoin and 18,800 Ethereum through its spot ETFs, reflecting a direct accumulation strategy. - This trend of direct institutional buying is not new for BlackRock, which launched a private trust in August 2022 to offer US-based institutional clients direct exposure to Bitcoin. This was followed by a partnership with Coinbase to provide institutional investors with access to crypto. - A significant portion of institutional investors are diversifying beyond Bitcoin and Ethereum, with 73% now holding other cryptocurrencies. The most commonly held alternatives include Ripple (XRP), Solana (SOL), and Dogecoin (DOGE).
