Traders flocked to BlackRock’s iShares Bitcoin Trust ETF (IBIT) as Bitcoin experienced a significant downturn, dropping 12% in just 24 hours. On Thursday, IBIT crushed its daily volume record, with $10 billion worth of shares changing hands, according to Bloomberg ETF analyst Eric Balchunas. However, the ETF also faced challenges, dropping 13% on the day, marking its second-worst daily price drop since launch. The largest crash was 15% on May 8, 2024.

IBIT's performance has been shaky lately. On Wednesday, it recorded net outflows of $373.4 million, with only 10 trading days of net inflows in 2026. This struggle follows a crypto market crash in early October, coinciding with Bitcoin's persistent decline. Bitcoin recently fell to $64,000 after hitting a low of $60,300, representing a staggering 50% drop from its all-time high of about $126,000 earlier this month, according to CoinGecko data.

IBIT has mirrored Bitcoin's trajectory, peaking at nearly $70 in October and now sitting at $36.10 as of Thursday's close. Bob Elliott, investment chief at Unlimited Funds, noted that the average dollar invested in IBIT is currently underwater, reflecting the fund's ongoing difficulties.

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Bitcoin ETFs See Surge in Inflows Amid Institutional Selling Pressure

US Bitcoin ETFs experienced significant inflows recently, reversing a trend of redemptions amid ongoing institutional selling. This dynamic highlights the asset's complex market positioning.

The latest Bitcoin crash has been fueled by weak US job market data and rising concerns over the substantial capital directed toward the artificial intelligence sector. Veteran trader Peter Brandt remarked that the current market conditions exhibit 'fingerprints of campaign selling,' suggesting a lack of buyers to stabilize prices.

This tumultuous period for Bitcoin and IBIT highlights the volatility inherent in cryptocurrency markets and the challenges faced by ETFs in maintaining investor confidence during downturns. The implications for traders and investors are significant, as the market's reaction to economic signals continues to dictate price movements.

As market dynamics shift, understanding these trends will be crucial for navigating future investments in Bitcoin and related financial products.