BlackRock, the world’s largest asset manager, is currently selling Bitcoin (BTC) holdings from its exchange-traded fund IBIT rather than buying.
BlackRock’s influence in the crypto sector grew after its launch of a Bitcoin ETF, named iShares Bitcoin Trust Bitcoin Holdings (IBIT).
JULISHA.CO.KE Analysts believe the entity is part of why BTC had a year of the books. However, following the new insight, speculation is growing that the asset manager could be selling BTC in reaction to the coin’s recent market pullback.
In May 2024, BlackRock reportedly moved a substantial amount of Bitcoin into cold storage, which was perceived by the market as a long-term investment strategy. The move was seen as a bullish signal, as investors rode on optimism that one of the most conservative financial institutions was betting on the longevity of Bitcoin.
However, on December 26, BlackRock made headlines when it reportedly sold $188.7 million worth of Bitcoin, its largest sell-off yet. On the same day, according to multiple sources, the asset manager transferred $1.88 billion worth of BTC to Coinbase wallets. The transactions were carried out in multiple tranches, drawing attention from market watchers.
At the time, it was unclear whether the firm was planning on letting go of the holdings or retain them on the exchange.
One user on X commented on the potential market impact, suggesting that BlackRock’s selling could lead to a short-term bearish sentiment, although long-term investors might see this as an opportunity to buy at lower prices.
Another added to the conversation by saying, “Institutions often sell when they think the market has peaked or for portfolio rebalancing, not necessarily because they’re bearish on the asset.”
Meanwhile, on January 2, BlackRock’s IBIT recorded its largest single-day net outflow, with investors withdrawing $332.6 million, according to data from Farside Investors. The investment vehicle hadn’t seen a negative net investment flow for the next four days up until January 8, where outflows peaked $100 million.
The IBIT, which holds the title of the largest Bitcoin ETF with approximately $56.2 billion in net assets, has been a dominant player in the cryptocurrency market. The ETF attracted over $37 billion in inflows, which JULISHA analysts believe contributed to Bitcoin’s rally to a new all-time high of over $108,000 in December.
In other news, The UK Treasury has announced that the proof-of-stake mechanisms underlying certain blockchains, such as Ethereum and Solana, will not be considered collective investment schemes(CIS). This is a good development for crypto since CIS is heavily regulated.
The order from the Treasury amends part of the Financial Services and Markets Act 2000, which concerns group investments. It clarifies that “arrangements for qualifying crypto asset staking do not amount to a collective investment scheme”.
The order, which will take effect on January 31, states that “qualifying crypto asset staking” means authenticating contracts on the blockchain, a distributed ledger technology network, or “other similar technology.”
The UK categorizes collective investment schemes as any disposition where participants earn profits or income, including investment funds and exchange-traded funds (ETFs.)
The Financial Conduct Authority takes its mandate very seriously in regulating CIS. Before venturing into collective investment schemes, one must register and get authorization. Also, agency-approved monitors will continuously check the ongoing compliance commitments.
Staking is a process that allows network participants to earn rewards by locking their native coins to validate transactions in blockchains such as Ethereum and Solana.
In November 2024, the Treasury promised to deliver a crypto regulatory framework by early 2025. The latest order appears like a headstart towards the Treasury promise.
Finally, Bitcoin (BTC) and Ethereum (ETH) are heading into a historically strong period for total gains. In Q1, especially in the year after a halving, both assets ended the period with net gains.
The first quarter of 2025 holds special expectations for both Bitcoin (BTC) and Ethereum (ETH). For BTC, historical data shows the first three months of a post-halving year are usually a period of positive developments.
BTC is yet to show if it will retain the trend, as its price action has been determined by a new set of factors. On the one hand, there is a strong trend of long-term holding, especially with messages from MicroStrategy that its BTC reserves would not be sold. On the other hand, the quarterly net gains may be small as volatile price moves cancel out.
The performance of BTC was questioned after the recent dip to $93,228.70, after a series of drawdowns. BTC has significant support above $87,000, but may still face panic-selling in case of a bigger drawdown.
Historical patterns may not always predict BTC price moves. January holds the risk of net losses, especially after the enthusiasm and peak gains of 2024. Others expect the true bull rally to be delayed to February or March.
Since 2020, BTC also posted smaller quarterly gains and losses, as the traders have found new trading strategies and avoid panic moves. However, even relatively stable range-bound trading can lead to losses.
BTC has plenty of bullish indicators, such as depleted exchange reserves and potential strong long-term holders. In the short term, volatility may return for both spot and derivative traders, and there are still fears of a bigger drawdown.
In the short term, BTC still trades with high levels of greed-based decisions. The relatively small drawdowns continue to shift funds to new cohorts of holders, as retail has rejoined the trend of accumulation. BTC remains bullish expectations for 2024, with predictions ranging from $140,000 to $250,000.
Ethereum (ETH) spent 2024 with increased usage, based on DeFi, stablecoins, and L2. The ETH price remained range-bound, only briefly breaking above the $4,000 level.
January is a predominantly positive month for ETH, with two exceptions – deep drawdowns in 2019 and 2022. This month, ETH accrued losses of 3.42% so far, with the chance to change the score in the coming weeks. In previous years, ETH saw the biggest drawdowns in June, July, and August.
Historically, ETH also outperformed in Q1, often becoming the catalyst for another altcoin season. ETH enjoys significant demand from ETF and multiple forms of locking and staking, along with relatively low new token inflation. Funds often add to selling pressures, with rapid shifts in sentiment. ETH remains one of the tokens with significant social media representation and bullish expectations, though still underperforming against BTC.
The biggest fear for ETH is a longer time span. Over time, ETH has achieved at most two years of positive performance in a row, ending the third year of the cycle with losses. In 2025, ETH enters with bullish predictions, expecting to break out to a new price range. However, drawdowns may break the rally, while also revealing the ongoing problems for Ethereum’s network.
Additionally, ETH grew by over 96% in 2023 but slowed down its growth to just 43% in the more bullish 2024. ETH faced controversies from L2 usage, while Solana and Base gained as the more widely adopted chains.
Ethereum remained the leader due to the passive usage of ETH as collateral, as well as the large supply of USDT. The chain mostly carried USDT transactions and Uniswap activity, based on the top smart contracts.
The only benefit for ETH is the expectation of catching up to the growth of BTC. In the short term, attitudes toward ETH were bullish both from retail and professional traders.