Bitcoin price has experienced a decline of over 5.5% in the past week, dropping from above $77,000 to approximately $72,600 on Thursday as risk sentiment has deteriorated. The move extends a broader pullback from early May’s highs above $82,000, leaving bitcoin price trading near 6–7% lower week-on-week as surging spot ETF outflows and US‑Iran tensions pressure prices. BlackRock’s iShares Bitcoin Trust experienced a significant net outflow of $527.84 million on Wednesday, marking its second-largest single-day withdrawal since the fund’s inception in January 2024. This figure is just shy of the all-time record by approximately $500,000. The figure falls within a wider retreat across the U.S. spot bitcoin ETF landscape, which collectively experienced a loss of $733.43 million that day, marking the largest combined daily outflow since late January. Despite the headline numbers, it’s essential to consider the context. IBIT continues to show impressive performance, maintaining over $2 billion in year-to-date flows and amassing $64 billion in lifetime net inflows since its inception. This achievement positions it within the top 2% of all ETFs based on cumulative flows. Wednesday’s $528 million draw accounts for less than 1% of that total. The outflow did not happen in a vacuum.
Bitcoin’s price dipped below the $73,000 mark during the Asian trading session on Thursday, experiencing a 3.4% decline over the past 24 hours, now sitting at $72,978. The immediate catalyst was a new wave of U.S. airstrikes targeting an Iranian military site close to the Strait of Hormuz, reigniting geopolitical risk that markets had started to factor in. As investors pulled out their ETF shares, BlackRock and other issuers had to liquidate underlying bitcoin to accommodate those withdrawals, creating a feedback loop that exacerbated the price drop and the outflow statistics. On the same day, Grayscale’s GBTC experienced a decline of $104.76 million, while Fidelity’s FBTC saw a loss of $60.30 million, alongside IBIT. Morgan Stanley’s MSBT emerged as the sole spot bitcoin ETF to register positive flows, attracting $4.3 million, as reported. One factor contributing to Wednesday’s outflow number was a transaction that occurred on Tuesday. A single investor executed a staggering $1.29 billion sale of IBIT shares through a dark-pool block trade — a discreetly negotiated transaction aimed at allowing significant players to shift large volumes without alerting the wider market. Bitcoin price hovered near $78,000 during that period.
Analyst Eric Balchunas highlighted the trade, pointing out that it involved 29.2 million IBIT shares and contributed to a total bitcoin ETF volume of $4.4 billion on Tuesday, marking the highest level since April 17. A dark-pool sale differs significantly from a net outflow. Buyers take on the opposite side of the transaction, meaning the fund itself may not experience redemptions. IBIT’s actual net outflow on Tuesday reached $192.44 million — significant, yet distinct from the block trade headline. The two events together indicate that institutional players are decreasing their bitcoin exposure, either through direct redemptions or exits in the secondary market. Lacie Zhang informed that the reported $1.3 billion IBIT block sale demonstrated “the market absorbed it without disorder,” emphasising how ETF infrastructure has “changed Bitcoin’s liquidity profile” by directing large trades through institutional channels instead of causing a noticeable crash. She noted that ongoing outflows indicate “a period of institutional cooling,” with Bitcoin stabilising in the $74K–$79K range as “Wall Street’s market plumbing acted as a shock absorber,” while a breakthrough above $80K is essential to regain upward momentum. The outflow data indicates a trend that has been developing throughout May.
Net ETF accumulation throughout the year has dwindled to around 4,500 BTC, with May marking a shift from the consistent buying observed in March and April to net distribution. Bitcoin’s price has seen a decline from over $82,000 on May 6 to below $73,000. Meanwhile, the ETF channel that significantly contributed to the 2025 bull run has been redirecting capital in the opposite direction for several weeks now. On Wednesday, JPMorgan provided further insights, highlighting that the pandemic-era “debasement trade” — the idea that bitcoin and gold act as safeguards against currency devaluation — seems to be losing momentum. The bank indicated that institutional futures positions and ETF outflows in both assets suggest that investors are factoring in a possible U.S.-Iran resolution ahead of any actual development. IBIT has navigated prolonged outflow periods previously in this cycle without a lasting reversal, with capital consistently flowing back as the macro environment improved. Whether this episode adheres to that pattern hinges on the trajectory of Middle East tensions and whether the shift from crypto to equities is fleeting or indicative of a deeper structural change.