BlackRock BTC ETF faces zero flows – Are North Korean hackers to blame?

  • Bitcoin ETFs faced $804.8 million in outflows from 27th August to 4th September.
  • North Korean hackers target crypto firms, impacting ETF stability and investor confidence.

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September has been a difficult month for the leading cryptocurrency, Bitcoin [BTC].

Bitcoin has had a tough time surpassing the $60,000 threshold, and Bitcoin-based exchange-traded funds (ETFs) have encountered substantial hurdles as well

Over the past few days, Bitcoin ETFs saw outflows of $804.8 million, sending shockwaves through investors and enthusiasts.

A notable point of interest is the iShares Bitcoin Trust ETF by BlackRock (IBIT), which hasn’t received any new investments since August 27th

The fund had zero inflows on many days, including the 27th, 28th, 30th of August and 3rd of September, adding to market concerns.

North Korean hackers to be blamed?

In light of recent developments, U.S. officials have alerted about an immediate danger stemming from North Korean cybercriminals, who are reportedly focusing their attacks on cryptocurrency companies that operate within the expanding Bitcoin Exchange-Traded Fund (ETF) sector

For context, North Korean hackers, notably the Lazarus Group, have a well-established pattern of targeting cryptocurrency firms and platforms.

The FBI has revealed that North Korean cybercriminals are focusing their efforts on employees at decentralized finance (DeFi) and cryptocurrency firms.

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BlackRock BTC ETF faces zero flows – Are North Korean hackers to blame?

The warning has raised concerns about the long-term viability of the Bitcoin ETF space as it navigates both financial and cybersecurity challenges.

IBIT investors’ shift

However, it’s important to note that, IBIT’s cumulative net inflows since its launch on 11th January were approaching $21 billion. 

In fact, on 22nd July, IBIT experienced a significant inflow of half a billion dollars, the largest since 13th March, according to SpotOnChain data.

This transition showcases how the ETF’s attractiveness to investors has varied through different periods, mirroring shifts in market conditions and investor attitudes

Ethereum ETF continues to outflow

On the flip side, there’s been a persistent trend of withdrawals from Ethereum [ETH] ETFs, interspersed by brief moments of deposits

Comparing the same time frame used for Bitcoin ETFs—from 27th August to 4th September—ETH ETFs recorded outflows on 27th, and 29th August and again on 3rd and 4th September.

On 30th August and 2nd September, the ETFs saw zero inflows.

On August 28th, there was a significant increase in investment (inflow) into Ethereum ETFs, amounting to approximately $5.9 million, as reported by Farside Investors

Just like the case with BlackRock’s Bitcoin ETF, there has been minimal investment activity, or inflows, into BlackRock’s Ethereum ETF during the recent period

However, despite the recent turmoil, ETF analyst Eric Balchunas maintains a positive outlook, believing that brighter days are ahead.

BlackRock BTC ETF faces zero flows – Are North Korean hackers to blame?

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2024-09-05 14:15