iShares BTC ETF investors weather major price drop with zero flows

At the market opening on Aug. 5, traders were in for a shock to see that the Bitcoin ETF managed by iShares ($IBIT) was down by 14% after already experiencing a decline of 8% the previous week. 

HODLers holding

However, as noted by Bloomberg senior ETF analyst Eric Balchunas, there were $0 in flows denoting that traders did not budge on their positions. Balchunas compared their unwavering-ness to the “Rock of Gibraltar” and said the industry is “lucky to have them.” 

While the total outflows for the group of ETFs were down $168 million, it only accounts for 0.3% of the total assets under management (AUM) and one third of that was from the Grayscale Bitcoin Trust ($GBTC). 

Balchunas followed up by saying that it’s possible to see more outflows this week, guesstimating that a “couple billion” could leave, even up to 5%.

“So far [though] looking much stronger than that. Even I've been surprised by the HODL ability of the boomers and equally surprised by the weakness of the natives.”

Market reactions

However, the massive outflows from the ETF market have consequential effects on the overall market, tipping the Crypto Fear & Greed Index into the “Extreme Fear” zone. This is the first time the index has reached this level in two years. 

Bitcoin (BTC) has also seen major fluctuations, crashing to $49,500 on Aug. 5. During this crash, long-term BTC holders sold roughly $600,000 of the cryptocurrency, with the rest of the losses being attributed to short-term holders. 

Nonetheless, amid the market turmoil, Bitcoin and Ether ETF still recorded almost $6 billion in trading volume on Aug. 5.

Meanwhile, the Ethereum ETFs were “unfazed” as pointed out by Balchunas on Aug. 6. The Bloomberg analyst highlighted that equity ETFs took in “double the cash” compared to normal in light of what he called the “scariest sell off in quite a while.”