IBIT Investor Returns Turn Negative as Bitcoin Slide Deepens
Bitcoin’s latest decline has likely pushed dollar-weighted returns for investors in BlackRock’s iShares Bitcoin Trust (IBIT) below zero, reflecting the depth of the recent market pullback.
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Bob Elliott, chief investment officer at Unlimited Funds, said the average dollar invested in IBIT turned negative after Friday’s close, as Bitcoin (BTC) fell into the mid-$70,000 range.
Elliott shared a chart tracking aggregate, dollar-weighted investor returns, indicating that cumulative gains dipped slightly into negative territory as of late January.
Source: Bob Elliott
The figures imply that while early IBIT participants may still be in profit, significant inflows at higher entry points have dragged overall dollar-weighted returns below zero. As a result, cumulative gains since the fund’s launch have been erased on a dollar-weighted basis.
For comparison, IBIT’s dollar-weighted returns peaked at roughly $35 billion in October, when Bitcoin was trading at record highs.
IBIT ranks among BlackRock’s most successful ETF launches, becoming the fastest fund to reach $70 billion in assets under management. In October, reports indicated IBIT generated about $25 million more in fees than the firm’s second-most profitable ETF.
Independent data on Yahoo Finance show IBIT’s net asset value has declined in recent weeks, mirroring the broader Bitcoin downturn. This aligns with the shift of dollar-weighted investor returns into negative territory.
Bitcoin ETF outflows accelerate
The weakening of dollar-weighted returns for Bitcoin ETFs has occurred alongside wider outflows from digital asset funds, as investors cut exposure amid falling prices. In the week to Jan. 25, Bitcoin funds recorded nearly $1.1 billion in outflows, while total crypto fund redemptions reached $1.73 billion — the largest weekly withdrawal since mid-November, according to CoinShares. The outflows were concentrated in the United States.
CoinShares attributed the trend to reduced expectations for interest rate cuts, negative price momentum, and frustration that digital assets have not yet benefited from a debasement trade.
Weekly fund outflows, as reported on Jan. 26. Source: CoinShares
The “debasement trade” refers to positioning in assets intended to maintain value during inflation and currency dilution. Bitcoin has been viewed as a potential candidate due to its fixed supply and monetary design, but it has not drawn flows to the same degree as gold. Despite a recent pullback, gold has remained in an uptrend for more than a year and recently set record highs above $5,400 per troy ounce.
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