- IBIT, an ETF providing exposure to crypto and blockchain stocks, hit a new record high for weekly trading volume last week amidst strong inflows and a price rally.
- The surge in volume and inflows indicates increased investor interest in gaining diversified crypto and blockchain exposure through ETF products like IBIT.
- However, some profit-taking and a pullback on Tuesday highlights that volatility persists in the crypto space, underscoring the need for prudent position sizing.
BlackRock’s iShares Blockchain and Tech ETF (IBIT) hit a new record for weekly trading volume last week, coinciding with strong inflows into the fund. However, Tuesday’s price action indicates some profit-taking may be occurring, with traders possibly deciding to sell shares and lock in gains.
Volume Record
Last week, nearly 5.5 million IBIT shares changed hands, surpassing the previous volume record from 2021. The surge in volume came amid a price rally that saw IBIT gain over 13% last week.
The spike in volume indicates increased interest in getting exposure to crypto and blockchain stocks through the ETF vehicle. BlackRock has marketed IBIT as a way for investors to gain diversified exposure to the blockchain ecosystem and crypto-related equities.
Inflows
In addition to the trading volume, IBIT saw strong inflows last week. The ETF took in $28 million in new money, marking its largest single week of inflows since launching in 2019.
The inflows suggest investors are becoming more comfortable with crypto and blockchain stocks as an investable asset class despite the turbulence in the broader crypto market recently. Large, conservative institutions like pension funds appear to be dipping their toes in the water.
Potential Profit-Taking
Despite last week’s surge higher, IBIT saw a pullback on Tuesday. The ETF fell by over 3%, giving back some of the previous week’s gains.
The decline indicates potential profit-taking is occurring, with traders who got in at lower prices possibly deciding to sell and lock in gains. IBIT is still up over 15% year-to-date, so traders who got in early 2022 or 2021 have sizable profits to capture.
The pullback illustrates crypto’s two-way price action and highlights the potential for sharp declines even amid an upward trend. More volatility in both directions seems likely as the crypto and blockchain space continues to mature.
Conclusion
IBIT’s record trading volume and inflows highlight growing mainstream interest in crypto and blockchain stocks. However, Tuesday’s decline shows the space’s volatility persists and underscores the need for measured position sizing and risk management. As adoption increases, more milestones and choppy price action seem likely.
