Wall Street Dumps Bitcoin, Switches to 'AI'?...IBIT Sees 9 Consecutive Days of Outflows

▲ Artificial Intelligence (AI), Bitcoin (BTC)/AI Generated Image

As funds flow out of Bitcoin (BTC) spot ETFs, Wall Street money is flocking to artificial intelligence (AI), raising concerns about liquidity drain from the cryptocurrency market.

According to crypto media outlet Coingape on May 29 (local time), BlackRock's iShares Bitcoin Trust (IBIT) recorded net outflows for nine consecutive trading days for the first time since its trading launch in 2024. Coingape reported that Bitcoin's price fell by 5.42% over seven days, and the continued IBIT outflows raised concerns about weakening institutional demand.

According to SoSoValue data, IBIT has lost $2.042 billion since May 15. Coingape also reported that $1.3 billion worth of IBIT was sold in a single trade on May 26. Glassnode analyzed that Bitcoin market risk began to rise from May 15, and Coingape explained that this was more akin to a capital shift than general market risk aversion, citing the S&P 500's rise from 7,408 to 7,563 during the same period.

According to CryptoQuant, whale and dolphin investors are also distancing themselves from Bitcoin. Coingape reported that 580,000 BTC purchased between $72,900 and $76,600 could be sold, potentially leading individual investors to follow suit.

Wall Street funds are heading towards AI companies instead of cryptocurrencies. Anthropic raised $65 billion with support from major financial firms including Blackstone, Fidelity, T. Rowe Price, Capital Group, and Jane Street. Ted, an analyst on X (formerly Twitter), pointed out that this fundraising is siphoning money from cryptocurrencies to AI, ahead of Anthropic and OpenAI's IPOs. Crypto Rover stated, "AI and memory stocks have risen 20 to 50 times in the past year. Most of those profits have not returned to crypto. It's the opposite. They are sucking up crypto liquidity."

Technical structures are also putting pressure on Bitcoin. Coingape analyzed that Bitcoin formed a bear flag after attempting a rebound following a drop from $78,000 to $73,000. The height of this pattern is 6.24%, and it could fall to $68,660 if it breaks below the $73,229 support level. The Relative Strength Index was 33, indicating weak momentum, and an analysis suggested that Bitcoin might fail to recover $75,000. However, Coingape added that the negative green bars of the Awesome Oscillator (AO) also indicate a potential slowdown in bearish pressure.

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