BlackRock’s spot bitcoin ETF posted its second-largest daily outflow on record Wednesday as escalating geopolitical tensions and a broader crypto sell-off pushed institutional investors to reduce exposure.
According to SoSoValue data, BlackRock’s iShares Bitcoin Trust (IBIT) recorded $527.84 million in net outflows, narrowly missing its all-time record withdrawal of $528.3 million set on Jan. 30, 2024. The difference between the two sessions was less than $500,000.
IBIT remains the dominant institutional bitcoin vehicle in the U.S., managing roughly $59 billion in assets and holding close to 4% of bitcoin’s circulating supply.
The withdrawals were part of a wider retreat across U.S. spot bitcoin ETFs. The 11 listed funds collectively saw $733.43 million leave the market on Wednesday. Alongside IBIT’s losses, Fidelity’s FBTC posted $60.3 million in outflows while Grayscale’s GBTC shed $104.76 million.
The sector has now experienced multiple consecutive days of net redemptions, with more than $2 billion exiting spot bitcoin ETFs over the past two weeks.
The heavy selling coincided with bitcoin’s drop below $73,000 after renewed Middle East tensions rattled global markets. BTC traded around $72,978 during Asian trading hours Thursday, down 3.4% over the previous 24 hours, after U.S. airstrikes targeting an Iranian military site near the Strait of Hormuz reignited fears of broader regional conflict.
ETF redemptions amplified the decline, as issuers including BlackRock were forced to sell underlying bitcoin holdings to meet investor withdrawals.
The outflows followed another notable IBIT-related transaction earlier in the week. On Tuesday, a single investor sold approximately $1.29 billion worth of IBIT shares in a dark-pool block trade, according to a CoinDesk report.
Dark-pool trades allow large investors to execute sizable transactions privately without immediately impacting public markets.
While the block trade itself did not directly translate into equivalent ETF outflows — since buyers may absorb the shares — IBIT still recorded $192.44 million in net redemptions that day. Together, the activity suggests institutions have been actively trimming bitcoin exposure as macroeconomic and geopolitical risks intensified.
ETF flow trends had already been weakening in recent weeks. Net ETF accumulation for the year had slowed to roughly 4,500 BTC, while May marked a shift away from the strong buying seen in March and April toward sustained distribution.
Bitcoin has fallen from above $82,000 on May 6 to below $73,000, reversing momentum from the ETF-driven rally earlier this year. The same investment vehicles that fueled bitcoin’s advance are now contributing to downside pressure through persistent outflows.
Whether the recent redemptions represent temporary risk reduction tied to Middle East uncertainty or the beginning of a broader institutional pullback may depend on how geopolitical conditions evolve in the coming weeks. Previous outflow streaks during this cycle have eventually reversed once macro conditions stabilized and investor sentiment improved.
