The love affair between Wall Street and Bitcoin is hitting a cold feet. BlackRock’s iShares Bitcoin Trust (IBIT), the largest and most respected doorway for pension funds, wealth managers and traditional institutions to own Bitcoin – has just suffered its worst run ever: five straight weeks of net withdrawals totalling more than $2.7 billion. Yesterday alone, another $113 million walked out the door, setting the stage for a possible sixth consecutive week of bleeding.
For context, when IBIT launched in January 2024 it was greeted like a rock star. Billions poured in every week as hedge funds, RIAs and even some conservative endowments finally got a clean, regulated way to ride the crypto wave. At its peak, the fund ballooned past $75 billion in assets under management.
Now the mood has flipped.
“Institutions aren’t panicking and dumping everything,” said a senior portfolio manager at a $40 billion multi-strategy fund that still holds Bitcoin exposure. “They’re just not adding any more. A lot of 2024 allocations were made at $60k–$70k. When it ran to $109k they took profits. Now that it’s back under $91k, many are happy to sit on the sidelines and wait for clearer signals.”
Bitcoin itself is nursing wounds. After a violent October liquidation cascade that erased roughly $1 trillion from the entire crypto market cap, the original cryptocurrency has fallen 28% from its all-time high and spent the last few weeks bouncing weakly between $88,000 and $94,000. As of this morning it is changing hands at $90,967 – down another 1% overnight.
The outflow streak is notable because IBIT had previously been almost immune to redemptions. Even during sharp drawdowns earlier in the year, the fund kept attracting fresh money. This is the first time the “smart money” has consistently hit the exit button for more than a month.
Analysts offer three main explanations:
1. Profit-taking after the explosive 2024 rally.
2. Rebalancing ahead of year-end – many funds locked in gains to dress up December statements.
3. Growing caution about macro risks in 2026: potential U.S. debt-ceiling drama, higher-for-longer interest rates, and regulatory uncertainty under a new administration.
James Butterfill, head of research at CoinShares, noted that while retail enthusiasm on platforms like Coinbase and Binance remains decent, “institutional pipelines have gone very quiet. The animal spirits that drove the post-election surge in November have cooled off.”
BlackRock has declined to comment on the withdrawals, but people familiar with the firm say the outflows are broadly distributed – no single large redemption is dominating – which suggests a widespread pause rather than a coordinated retreat.
Whether this is a healthy breather or the start of a deeper institutional pullback will become clearer in January, when new allocation decisions for 2026 are typically made.
For now, the message from the biggest players on Wall Street is simple: they still like Bitcoin, but the FOMO has left the building.
