BlackRock’s IBIT adds $276M in Bitcoin – Can BTC escape its downtrend?

Bitcoin [BTC] has been in a downtrend since its attempted upside move collapsed at $84.9k ten days ago. In fact, since then, Bitcoin has fluctuated between $79k and $81k.

At press time, Bitcoin was trading around $80,046, down 3% on weekly charts. As BTC struggles to regain the uptrend, some ETFs are taking the market slowdown as an opportunity to buy more.

BlackRock adds $276 million in Bitcoin

BlackRock’s IBIT has been actively buying BTC over the past three sessions, defying the overall dull market. According to Onchain Lens, BlackRock’s IBIT Bitcoin ETF wallets accumulated 3,441.176 BTC worth $276.7 million from Coinbase Prime over the past 24 hours.

Between the 26th and 28th of October, the fund purchased $397 million in Bitcoin. The sustained net inflows despite overall market weakness suggest that investors have deployed more capital into the fund.

This indicates a higher interest in gaining market exposure. However, it’s important to note that inflows don’t directly imply that prices are guaranteed to rise.

Surprisingly, aside from BlackRock, most other funds have remained calm. In the previous session, only Bitwise’s BITB recorded $1.32 million in net Inflows.

In total, these funds saw $137 million in daily Net Inflows, with BlackRock accounting for most of it. With ETFs pulling Bitcoin out of exchanges over the past three days, exchange activity seems to reflect accumulation.

After being positive for three consecutive days, Spot Netflow dropped into negative. At press time, Netflow was around -$20 million, a clear sign of increased withdrawals.

Institutional capital keeps off

Although BlackRock is buying and ETFs are recording net inflows for three sessions, it doesn’t mean a return of institutional capital.

In fact, institutional demand has remained weak for a prolonged period. The Coinbase Premium Index confirms this, having remained negative since September.

While it’s not direct proof of institutional selling, it points to weak demand from U.S. investors. Notably, limited institutional buying pressure from U.S.-based investors has historically coincided with market weakness.

This explains the current market conditions, and a look at previous cycles shows that Bitcoin has continued to decline under the same circumstances.

Therefore, if this demand remains weak despite ETF inflows, we could see extended market weakness with a likely drop to $76k. 

For now, however, ETF inflows offer a chance for another leg up. If BlackRock continues to purchase, it could help Bitcoin defend $80k and eye a move towards $84k.

Final summary

• BlackRock’s IBIT wallets accumulated 3,441.176 BTC worth $276.7M from Coinbase Prime, recording inflows for three consecutive days. 
• Institutional demand for BTC has remained relatively weak, extending the current market bearishness.