BlackRock's Bitcoin ETF Records New Record Outflows In December 2024

In December 2024, BlackRock’s Bitcoin (BTC) exchange-traded funds (ETFs) recorded new record net outflows, while Ethereum (ETH) ETFs attracted more than $2.5 billion in net inflows. This trend marks a notable shift in the preferences of institutional investors.

New record outflows for BlackRock’s Bitcoin ETF

BlackRock’s iShares Bitcoin Trust ETF (IBIT) experienced its largest recorded outflow ever, reaching $188.7 million on December 24, 2024. This outflow surpassed the previous record of $73 million set a few days earlier. Bitcoin ETFs in the United States collectively faced net outflows of $1.5 billion over four consecutive days, peaking at $338.4 million on Christmas Day.

In contrast, Ethereum ETFs showed positive momentum with continued net inflows. Ether ETFs recorded inflows of $53.6 million on December 24, following an inflow of $130.8 million the day before. Since their launch in July, Ether ETFs have gradually gained traction, despite a slower start compared to Bitcoin ETFs launched in January.

A shift in momentum for Ethereum?

This divergence in fund flows reflects a growing interest in Ethereum, supported by several factors. First, ETH has outperformed BTC in the spot and derivatives markets since November 2024. Secondly, the growing activity of the Ethereum network, particularly due to the proliferation of artificial intelligence agents, has reinforced investor confidence in the long-term potential of ETH.

Analysts predict that Ethereum could continue to outperform Bitcoin in January 2025, supported by its relative strength against BTC. The ETH/BTC ratio, currently at 0.035, indicates a possible outperformance of ETH at the beginning of the year. However, BlackRock’s Bitcoin ETF marks the beginning of a new era for institutional involvement in the crypto market. As Ryan Lee, chief analyst at Bitget, believes:

BlackRock’s Bitcoin ETF is poised to accelerate Bitcoin’s adoption by simplifying access for institutional investors, enhancing its legitimacy and facilitating mainstream acceptance. By bridging traditional finance with cryptocurrency, the ETF is expected to stabilize Bitcoin’s market perception and potentially reduce price volatility. This ETF represents a pivotal step in Bitcoin’s integration into traditional investment portfolios, signaling a new era for institutional involvement in the cryptocurrency market.

In summary, BlackRock’s record net outflows from Bitcoin ETFs and significant net inflows to Ethereum ETFs in December 2024 signal a shift in the preferences of institutional investors. If this trend continues, Ethereum may well definitively surpass Bitcoin in the ETF market in 2025.