US$333m yanked from bitcoin ETF in one day

Agencies

Investors yanked a net US$333 million (HK$2.6 billion) from BlackRock's iShares Bitcoin Trust ETF on Thursday, the most withdrawn from the record-breaking fund since its launch.

The fund also suffered a third consecutive day of outflows, its longest losing streak, according to data compiled by Bloomberg.

As the largest spot bitcoin fund with over US$53 billion in assets and nearly US$37 billion in inflows, IBIT proved a major hit with institutional investors after a January launch and helped push the largest digital asset to an all-time high of US$108,315 in mid-December.

The tapering of flows to IBIT is another sign of bitcoin's record-breaking run in 2024 taking a breather. The group of a dozen bitcoin exchange-traded funds in the US have posted a net outflow of about US$2 billion since December 19, according to Bloomberg.

Open interest - or outstanding contracts - for Bitcoin futures hosted by Chicago-based CME Group, seen as a measure of US institutional demand, also fell nearly 20 percent from its December peak.

Meanwhile, a US bank regulator told banks to pause dabbling directly in crypto in 2022 and 2023, but did not order them to stop providing banking services to crypto companies contrary to industry complaints of widespread "debanking," according to documents released on Friday.

A judge ordered the Federal Deposit Insurance Corporation to provide versions of supervisory "pause letters" it sent to unidentified banks after History Associates Incorporated, a research firm hired by crypto exchange Coinbase, sued the agency to release them.

The FDIC first released the letters in December but was ordered by the judge to resubmit them with more "nuanced redactions."

The new batch of 25 letters includes two additional letters sent to unidentified banks that were not included in the original FDIC submission.