BlackRock's Reason for Transferring $204 Million in Bitcoin: Will It Sell Out?

Bittime - Recently, Bitcoin price volatility has increasingly worried investors. Many monitor various events that can affect the market. One important development is the transfer of Bitcoin and Ethereum by BlackRock to Coinbase Prime, sparking fears of a potential massive sell-off.

BlackRock, as the primary asset custodian and issuer of the IBIT Bitcoin ETF, recently transferred $204 million worth of assets, including 1,800 BTC (worth $160 million) and 18,168 ETH (worth $44 million), to Coinbase Prime. 

Transfer large amounts to exchange it often signals potential asset sales, sparking concern among investors already nervous about the downturn Bitcoin price up to $88,300.

Is This Transfer a Sign Sell-Off?

However, experts warn that this transfer is not necessarily indicative sell-off. BlackRock, as custodian, manages assets for ETF investors without undertaking trading directly. 

Analysts argue that these transfers are more likely part of routine fund management, such as rebalancing portfolio or redemption of funds by investors.

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ETF Outflows Raise Concerns

BlackRock's transfer came as the Bitcoin ETF market faced significant outflows, with investors withdrawing $937.9 million in a single day. Fidelity's FBTC ETF saw outflows of $344.7 million, while BlackRock's IBIT ETF saw $164.4 million. 

With BlackRock holding 584,789 BTC (2.6% of total supply), the potential sell-off can have a significant impact on the market.

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BlackRock Remains Optimistic On Bitcoin

Despite existing concerns, BlackRock continues to be a strong supporter of Bitcoin. CEO Larry Fink even predicted that Bitcoin could reach $700,000 if sovereign wealth fund invest in it. Despite market uncertainty, there are no clear signs that BlackRock is selling its Bitcoin. 

The recent transfer is in line with the company's routine fund management, not a move to exit the crypto market.

Bitcoin Volatility Raises Caution

Bitcoin price recently fell below $90,000, marking a significant decline from its peak of $109,000. Standard Chartered's Geoff Kendrick predicted a potential 10% drop, attributing it to outflows from US Bitcoin spot ETFs. 

Additionally, Arthur Hayes, co-founder of BitMEX, suggested that Bitcoin prices could fall back to levels between $70,000 and $75,000, seen before the US election if former president Donald Trump does not succeed in passing his proposed budget, which includes plans for increased government spending and an increase in the debt ceiling.

With global economic uncertainty and crypto price fluctuations, investors are advised to remain vigilant and carefully consider every investment decision.

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FAQ 

Why did BlackRock transfer $204 million in Bitcoin and Ethereum?

BlackRock transferred those assets to Coinbase Prime, which is often a signal for routine fund management such as rebalancing portfolio or redemptions by investors, are not indicative of a major sell-off.

What is the impact of large Bitcoin ETF outflows?

Bitcoin ETF outflows reaching $937.9 million in a single day may spark concern in the market, especially as BlackRock holds 2.6% of the total Bitcoin supply, so the potential sell-off could have a significant impact.

Is BlackRock planning to sell its Bitcoin?

Despite concerns in the market, there are no clear signs that BlackRock will sell its Bitcoin. The transfers made had more to do with routine fund management than a move to exit the crypto market.

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Reference

Nidhi Kolhapur, Is BlackRock Preparing for a Bitcoin Sell-Off with $204M Transfer?, Accessed February 27, 2025

Author: IN