YEREVAN (CoinChapter.com) — BlackRock’s iShares Bitcoin Trust ETF (IBIT) has gained attention since its launch, but analysts highlight key challenges. Bloomberg’s senior ETF analyst Eric Balchunas noted a significant issue—Bitcoin’s correlation with the stock market.
Bitcoin’s movement alongside stocks affects IBIT’s position as a distinct investment. While IBIT reached $50 billion in its first year, surpassing Vanguard’s VOO ETF, which took six years, institutional adoption remains a concern.
Stock Market Correlation Impacts IBIT Growth
Balchunas stated that IBIT must attract more investment to maintain its trajectory. However, Bitcoin’s connection to stock trends raises uncertainty.
“IBIT did reach $50 billion in first year (it took VOO six years to hit that mark) so definitely one to watch, but it would take a ton more adoption (flows), and you probably need a break in correlation with stocks,” Balchunas said.
Eric Balchunas Analyzes IBIT ETF Growth and Stock Correlation. Source: XInvestors often look at Bitcoin ETFs as a hedge against traditional markets. However, Bitcoin’s decline during stock downturns reduces its appeal, making institutional participation uncertain.
Institutional Investors Maintain IBIT Holdings
Despite concerns, filings show sustained interest in IBIT. Recent 13F filings indicate that 1,100 institutions hold IBIT, surpassing the previous first-year record of 350 holders.
“For context, NUKZ, a nuclear-themed ETF launched the same day as IBIT, has only 29 holders. Most new ETFs have under 10,” Balchunas noted.
Eric Balchunas Highlights IBIT ETF’s Record Institutional Holders. Source: XBlackRock’s iShares Bitcoin Trust ETF (IBIT) remains the largest Bitcoin ETF, holding 2.98% of Bitcoin’s total supply. Abu Dhabi’s Mubadala Sovereign Wealth Fund recently acquired $436 million worth of IBIT shares, ranking as the ETF’s seventh-largest holder.
Outflows Increase in 2025
While institutional participation continues, Bitcoin ETF outflows have increased in 2025. Last week, Bitcoin ETFs recorded $585 million in net outflows, the first decline in net holdings.
Bitcoin Spot ETF Weekly Inflow and Net Assets Trends. Source: SoSoValueOn Feb. 18, Bitcoin ETFs faced $129 million in withdrawals, extending the trend. Analysts link the decrease to concerns over the Federal Reserve’s monetary policy. Fed Chair Jerome Powell rejected immediate rate cuts, leading investors to reassess risk.
Bitcoin ETFs expanded in 2024, with total assets under management rising to $38 billion in Q4. However, concerns about inflation and Federal Reserve decisions may slow investment in 2025.
At the moment of writing, Bitcoin is trading at $95,869 on Tradingview, showing a slight 0.02% increase. The price chart indicates volatility, with Bitcoin experiencing multiple dips and recoveries over the past few days.
Bitcoin Price Volatility and Market Trends on Bitstamp. Source: TradingView
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