Short Description: The average investor in BlackRock’s popular iShares Bitcoin Trust (IBIT) is now underwater as Bitcoin’s sharp decline pushes dollar-weighted returns into negative territory.
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Main Article
A sharp decline in Bitcoin price has eroded the cumulative profits for investors in Bitcoin spot ETFs, with BlackRock’s iShares Bitcoin Trust (IBIT) now seeing its aggregate, dollar-weighted returns slip into negative territory. According to analysis from Bob Elliott, CIO of Unlimited Funds, the average dollar invested in IBIT is underwater following Bitcoin’s slide into the mid-$70,000 range over the weekend. This suggests that while early investors may still hold profits, the substantial capital that flowed into the fund at higher price levels has now pulled the overall investor position into the red. IBIT, one of the fastest ETFs ever to reach $70 billion in assets, has seen its dollar-weighted returns swing from a peak of roughly $35 billion in October to a slight cumulative loss.
This downturn in dollar-weighted investor returns directly coincides with accelerating Bitcoin ETF outflows. Data from CoinShares reveals a significant pullback, with nearly $1.1 billion exiting Bitcoin-focused investment products in a single week and total crypto fund outflows hitting $1.73 billion—the largest weekly withdrawal since mid-November. Analysts attribute this flight of capital to a combination of dwindling expectations for near-term interest rate cuts, negative price momentum, and investor disappointment that Bitcoin has not yet acted as a robust “debasement trade” hedge against inflation to the same extent as assets like gold.
The Bitcoin spot ETF landscape, a beacon for institutional capital in early 2025, is now facing its first major test of sustained pressure. The recent crypto investment products outflow, heavily concentrated in U.S. funds, underscores a shift in sentiment. Investors are reassessing their exposure as the Bitcoin price decline challenges the narrative of an uninterrupted bull market. This period highlights the inherent volatility of cryptocurrency assets, even within these regulated, mainstream financial wrappers, and places a new focus on the cost basis of late-arriving institutional and retail capital.
Short Summary
Bitcoin’s recent price drop has pushed the average IBIT investor into a loss on a dollar-weighted basis, erasing earlier cumulative gains. This shift aligns with massive outflows from Bitcoin ETFs as sentiment sours. The data underscores the volatile nature of crypto investment products, with current holders now facing a test of their conviction amid changing market dynamics.
