SKN | BlackRock’s Bitcoin ETF Sees $10 Billion Trading Frenzy as IBIT Volume Spike Signals Peak Selling

Key Points

• BlackRock’s spot bitcoin ETF IBIT recorded over $10 billion in notional trading volume, the highest in its history.

• The volume surge coincided with a 13% price drop and heavy redemptions, highlighting intense institutional selling pressure.

• Extreme put-option demand and record turnover suggest capitulation, though bear markets can still persist beyond peak fear.

A surge in trading activity at BlackRock’s flagship bitcoin fund is intensifying debate over whether the current crypto sell-off is nearing a moment of capitulation. On Thursday, BlackRock’s spot bitcoin exchange-traded fund IBIT recorded its highest trading volume since launch, eclipsing $10 billion in notional value as prices slid sharply and investor pessimism deepened.

The spike in activity came as bitcoin itself extended a steep decline, briefly falling toward the $60,000 level and dragging related investment products lower. For market participants, the scale and timing of the IBIT volume surge is being read as a potential sign that fear-driven selling may be approaching an extreme.

Record Volume Meets Sharp Price Decline

According to Nasdaq data, IBIT saw more than 284 million shares change hands in a single session, far surpassing its previous record of 169.21 million shares set in November. In notional terms, the turnover exceeded $10 billion, underscoring the intensity of repositioning by both institutional and active traders.

The frenetic trading coincided with a 13% drop in IBIT’s share price, which fell below $35 for the first time since October 2024. The move extended the fund’s year-to-date decline to roughly 27%, a stark reversal from early October, when IBIT traded near its peak of $71.82 amid a broader crypto rally.

IBIT, managed by BlackRock, is the world’s largest publicly listed bitcoin fund and holds physical bitcoin to closely track spot prices. It has become a primary vehicle for institutions seeking regulated exposure to cryptocurrency markets, making its trading behavior a closely watched barometer of professional sentiment.

Redemptions Highlight Institutional Stress

Heavy redemptions added to the pressure. Data from SoSoValue shows IBIT recorded $175.33 million in net redemptions on Thursday alone, accounting for about 40% of the $434.11 million in cumulative net outflows across 11 spot bitcoin ETFs that day. The scale of withdrawals suggests that selling is not limited to short-term traders, but includes longer-horizon investors reducing exposure as losses mount.

This institutional retrenchment mirrors broader trends across the crypto market, where declining liquidity and forced liquidations have accelerated price moves. Bitcoin’s drop toward $60,000 amplified losses in ETF products designed to mirror its spot performance, creating a feedback loop between underlying prices and fund flows.

Options Markets Flash Capitulation Signals

Derivatives markets reinforced the picture of rising fear. Options tied to IBIT showed an unusually strong tilt toward downside protection, with longer-dated put options trading at a premium of more than 25 volatility points above call options, according to data from MarketChameleon. Such an imbalance typically reflects demand for hedging rather than speculative upside bets.

Historically, periods marked by record volume, sharp price declines, heavy redemptions, and pronounced put buying have coincided with capitulation phases  moments when investors exit positions en masse, often near the most intense selling pressure of a bear market. These episodes can precede stabilization, though they do not guarantee an immediate rebound.

Reading the Signal Carefully

While some traders interpret Thursday’s activity as a sign that peak selling may be close, caution remains warranted. Bear markets have a history of lasting longer than expected, and extreme fear can persist even after initial capitulation events. Liquidity conditions, macroeconomic stress, and further bitcoin price weakness could still prolong the downturn.

For now, IBIT’s record-breaking volume stands as a vivid snapshot of a market under stress. Whether it marks the exhaustion of sellers or merely another chapter in a deeper correction will depend on whether outflows slow and confidence begins to rebuild across institutional channels in the weeks ahead.