TLDR
- BlackRock sold over $28 million worth of Bitcoin during a sharp decline in the crypto market.
- The firm bought more than $45 million in Ethereum shortly after selling its Bitcoin holdings.
- BlackRock’s iShares Bitcoin Trust recorded a $29.46 million outflow in a single day.
- The iShares Ethereum Trust saw a $46.9 million inflow which was the highest among all Ethereum ETFs.
- Grayscale and Fidelity funds reported outflows while BlackRock was the only major issuer with ETH inflows.
BlackRock sold a significant amount of Bitcoin (BTC) and increased its Ethereum holdings amid a sharp market downturn. The move involved liquidating over $28 million worth of Bitcoin and purchasing more than $45 million in Ethereum. Market volatility triggered this change, as institutional investors reacted swiftly to shifting dynamics.
BlackRock Reduces Bitcoin Exposure During High Volatility
BlackRock deposited 272.4 BTC, valued at $28.36 million, into Coinbase Prime just five hours ago. This action indicated an apparent reduction in the firm’s Bitcoin exposure amid heavy liquidations. The crypto market faced over $1 billion in forced shutdowns within 24 hours, increasing pressure on traders.
Bitcoin alone accounted for $369 million in total liquidations, highlighting the market’s fragile position. Consequently, the iShares Bitcoin Trust (IBIT) reported a $29.46 million outflow in a single day. Other U.S. Bitcoin ETFs also recorded a combined $536.44 million outflow, confirming the sector-wide trend.
Although other funds showed weakness, BlackRock’s actions stood out due to its influence and timing. The shift echoed a similar move made last month, but in the opposite direction. Then, BlackRock had exited Ethereum to accumulate more Bitcoin, showing an ongoing strategy shift.
After selling Bitcoin, BlackRock withdrew 12,098 ETH from Coinbase Prime, valued at approximately $45.47 million. The iShares Ethereum Trust (ETHA) experienced a net inflow of $46.9 million, surpassing all other U.S. Ethereum ETFs. This indicates institutional interest in Ethereum, despite overall crypto sentiment remaining weak.
While Grayscale and Fidelity funds experienced outflows, BlackRock recorded the only inflow of ETH among major institutions. This divergence suggests a reallocation strategy favoring Ethereum amid broader asset rebalancing. It also hints at potential confidence in Ethereum’s medium-term prospects.
Despite Ethereum contributing $262 million to the total liquidations, sentiment is stabilizing. CryptoQuant noted that ETH open interest is decreasing, which often signals a reduction in speculative trading. Analysts view this as a possible sign of consolidation and a less volatile phase.
Market Conditions Favor Ethereum Setup for a Possible Rebound
Arthur Hayes, co-founder of BitMEX, called the Bitcoin dip a buying opportunity following its drop to a four-month low. However, focus shifted toward Ethereum, with traders eyeing possible bullish setups. Fundstrat’s Tom Lee described the ETH setup as “very constructive,” reflecting growing optimism.
Most leveraged ETH positions are now short, increasing chances of a short squeeze and a sharp price rebound. ETH traded around $3,800 after a 13% weekly decline, indicating strong resilience. BlackRock’s move aligns with these developments and could influence broader investor sentiment.
