BlackRock´s Bitcoin ETF Investors Came Late to the Crypto Party

Cryptocurrency

Summary:

Many crypto enthusiasts also argue that the token is a long-term hold, given its ability to rally back forcefully following major drawdowns.

BlackRock Inc.’s (BLK) flagship Bitcoin (BTC-USD) ETF has delivered strong returns since its launch — but for most investors, the outcome has been far more modest.

The iShares Bitcoin Trust (IBIT) posted a more than-40% annualized return from its January 2024 debut through November 2025, data compiled by Bloomberg show, even after the recent crypto selloff. But the average investor earned just 11% annualized over the same period, according to new analysis by Morningstar. Much of that disconnect owes to poor timing: many investors piled in only after the fund had already surged — underscoring how market timing can blunt even the best-performing products.

That underperformance matters now because it helps explain why money is starting to flow out after a sweeping crypto downturn. IBIT just saw its sixth straight week of outflows — the longest losing streak since its inception — in a sign that the recent Bitcoin rebound has yet to restore investor conviction. In November, investors pulled more than $2.3 billion from the exchange-traded fund — the largest monthly redemption and only the second monthly withdrawal this year.

One reason: for many investors, the payoff hasn’t matched the pitch. The ETF wrapper may have solved the Bitcoin access problem — but not the timing problem.

“The ETF has done its job — it has tracked Bitcoin almost perfectly and thus notched excellent total returns since inception,” Jeffrey Ptak, a managing director at Morningstar, wrote. “The problem is investors appear to have arrived late to the party.”

BlackRock declined to comment. BlackRock´s Bitcoin ETF Investors Came Late to the Crypto Party_1

The gap stems from the difference between what the fund earned and what investors actually experienced. Morningstar’s Ptak compared IBIT’s total return and dollar-weighted return. The result is a more realistic picture of how the average dollar fared.

In IBIT’s case, most inflows came after the ETF had already surged. By the time the fund’s asset base swelled, the pace of gains had slowed. That pattern — enthusiasm peaking after performance — is common in high-volatility investments, but the magnitude here was notable. Nearly 60% of IBIT’s total dollar gains came in its first 66 days, wrote Ptak, when few investors were actually in the fund.

“The large gap between the ETF’s dollar-weighted and total return underscores the importance of staying the course,” he said. “If current investors do so, their average dollar’s return should gradually converge toward the ETF’s total return. If not, it will likely continue to lag.”

All told, the average Bitcoin-ETF investor underperformed gold, the S&P 500 and even a plain-vanilla 60/40 stock-and-bond portfolio, which returned more than 15% annualized over the stretch Ptak looked at.

To be sure, Ptak, in his conversations with BlackRock, highlighted factors that help explain the chasm, such as limited access to the Bitcoin funds early on, institutional derivatives-driven outflows — since big money funds like hedge funds use a popular trading strategy called the basis trade — and in-kind Bitcoin transfers, a recent development.

Many crypto enthusiasts also argue that the token is a long-term hold, given its ability to rally back forcefully following major drawdowns.

And regardless of one’s view, there’s no denying that demand has been strong. IBIT, for one, has received positive net flows on 80% of trading days since inception, according to Morningstar. Assets across US spot-Bitcoin ETFs total some $117 billion.

In the eyes of James Seyffart of Bloomberg Intelligence, the analysis is fair. But dollar-weighted returns are just one window into a fund’s performance.

“Dollar-weighted returns are more a critique of the investor than the fund adviser,” Seyffart said. “We know on average investor behavior is not great, particularly in high-momentum funds like this.”

Source: Bloomberg

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Political

European leaders are increasingly confident they will reach a deal to use frozen Russian assets before the end of the year following talks in London, even as distance remained between Europe and the US on providing security guarantees for Kyiv.

Volodymyr Zelenskiy and his allies made “positive progress” to use immobilized Russian sovereign assets to back a €90 billion ($105 billion) loan for Ukraine’s reconstruction, UK Prime Minister Keir Starmer’s office said following the meeting on Monday. European leaders were now optimistic an agreement could be reached before Christmas, according to people familiar with the matter.

Ukraine’s allies are under growing pressure to find fresh sources of financing after US President Donald Trump’s administration largely stopped aid to the war-ravaged country. As peace talks between Washington, Moscow and Kyiv intensified in recent weeks, the US has even suggested that it could use the money for post-war investments.

The European Union last week put forward a proposal to use the immobilized assets as it estimates Ukraine will need €135 billion over the next two years to keep basic services running and to prop up its military.

But the EU has had to contend with opposition to the plan from within the bloc from several countries including Belgium, where most of the funds are held. The leaders will meet in Brussels on Dec. 18 to seek agreement.

“We are now quite close to finding a legally and politically sustainable solution,” Finnish Foreign Minister Elina Valtonen told Bloomberg TV in an interview on Monday. “I think using the Russian central bank’s assets for funding the survival of Ukraine is not only morally, but in so many other ways, also the right thing to do.”

The London meeting among Starmer, Zelenskiy and leaders of France and Germany took place against a backdrop of concern in European governments that a US-brokered peace initiative to end the conflict in Ukraine risked making too many concessions to Russian leader Vladimir Putin.

The leaders “aligned a shared position on the importance of security guarantees and reconstruction, and agreed on the next steps,” Zelenskiy said on X. His remarks suggest the meeting failed to deliver a breakthrough on what is a key component of any peace settlement with Russia that Kyiv can accept.

Control over eastern regions of Ukraine as well as security guarantees from allies are among a number of “sensitive issues” that require further discussions, Zelenskiy told Bloomberg News earlier on Monday.

The London meeting was followed by a call with leaders from the EU, Finland, Norway, Italy, Denmark, Poland, Sweden, the Netherlands, NATO and a senior representative from Turkey.

The British statement noted that national security advisers for European governments would continue discussions in coming days.

“The leaders all agreed that now is a critical moment and that we must continue to ramp up support to Ukraine and economic pressure on Putin to bring an end to this barbaric war,” Starmer’s office said.

In the course of several frenetic weeks of negotiations, Ukraine has managed to water down an initial 28-point peace plan floated by the US, which appeared favorable to Russia by attempting to bar Kyiv from joining NATO and capping the size of its army. A new 20-point framework document has emerged, but there remains little clarity on how Moscow will be deterred from launching another attack in the future.

Trump said on Sunday he was “a little bit disappointed” in Zelenskiy, who he claimed hadn’t yet read the proposal. Moscow, on the other hand, was “fine with it,” Trump told reporters. Ukraine has been under growing US pressure to agree to a deal.

Zelenskiy said he may send the latest draft version of the peace plan to Washington on Tuesday. Ukraine is looking for legally binding security guarantees from the US that are approved by Congress, the president told reporters during his flight to Brussels late on Monday.

Trump has grown increasingly impatient with the lack of progress in talks to end the war, which he had pledged to resolve within 24 hours of taking office. In doing so, he’s repeatedly sounded sympathetic to Russia, the country that started the full-scale invasion of its smaller neighbor almost four years ago. Last week, a US national security strategy document signed by Trump said European governments “hold unrealistic expectations for the war.”

Ukraine’s European allies have largely been shut out of the American-led diplomacy. Trump has dispatched his special envoy, Steve Witkoff, and son-in-law Jared Kushner to work over the proposal in talks in Moscow, while Ukrainian officials have shuttled between Kyiv, Geneva and Florida.

Arriving in London for the talks with Starmer, Zelenskiy said his country needed unity among its main allies to secure a pact. But he also signaled that the talks with the US have yet to yield agreement on Ukraine’s Donbas, including the provinces of Donetsk and Luhansk.

The US said on Friday that negotiators had locked in an agreement with Kyiv on a “framework of security arrangements” and discussed what was needed to prevent another attack, though there was little indication of a major breakthrough.

“There are visions of the US, Russia and Ukraine — and we don’t have a unified view on Donbas,” Zelenskiy told Bloomberg News earlier Monday.

The Kremlin is demanding that Ukraine cede areas of the Donetsk region that its troops failed to take by force in almost four years of war. The US has proposed making the area a de-militarized zone. Zelenskiy and European allies have repeatedly said a ceasefire must be imposed along the current front line, rejecting a demand for the Ukrainian army to withdraw.

After the meeting in London, Zelenskiy headed on to Brussels for further talks with European officials, and plans to then fly to Rome for a meeting with Italian Prime Minister Giorgia Meloni on Tuesday.

“After that, we will have our joint vision” for the talks, Zelenskiy said. “And I am ready to fly to the US if the president is ready for such a meeting.”

Source: Bloomberg

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Central Bank

Forex

The U.S. dollar rose against major currencies on Monday in choppy trading ahead of a week packed with central bank meetings and headlined by the Federal Reserve, where an interest rate cut is all but priced in, but investors braced for signals of a milder easing cycle than expected.

The yen, on the other hand, weakened across the board after a powerful magnitude 7.6 earthquake shook Japan's northeast region late on Monday, prompting tsunami warnings and orders for residents to evacuate.

Besides the Fed decision on Wednesday, the central banks of Australia, Brazil, Canada and Switzerland also hold rate-setting meetings, although none of these are expected to change monetary policy.

Analysts expect the Fed to make a "hawkish cut", where the language of the statement, median forecasts and Chair Jerome Powell's press conference point to a higher bar for further rate reduction.

The Federal Open Market Committee, which sets monetary policy, is expected to announce on Wednesday that it will lower the benchmark overnight rate by 25 basis points to a range of 3.50%–3.75%, with the central bank easing for a third straight meeting.

That could support the dollar if it pushes investors to dial back expectations for two or three rate cuts next year, though messaging could be complicated by policymakers' divisions; several have already all but indicated their voting intentions.

"In an economy that is not falling apart and inflation is relatively tame, the Fed can feel comfortable cutting interest rates while also not promising nor guaranteeing further moves into the future," said Juan Perez, director of trading, at Monex USA in Washington.

"Hard to envision officials plotting into the future much when they really still need to look into the past to better assess where we are. Where we are seems to be a period of stagflation, so you are getting mixed views as officials themselves do not hold consensus over conclusions regarding the economy."

The dollar index was last up 0.1% at 99.07 . Against the Swiss franc, the greenback rose 0.2% to 0.8066 franc .

HIGH RISK OF DISSENT

"We expect to see some dissents, potentially from both hawkish and dovish members," said BNY's head of markets macro strategy, Bob Savage, in a note to clients.

The Federal Open Market Committee has not had three or more dissents at a meeting since 2019, and it has happened just nine times since 1990.

Even though the U.S. currency has drifted lower for the past three weeks, dollar bulls have recovered some of their nerve.

Weekly positioning data shows speculators hold their largest long position - one that assumes the value of the dollar will rise - since before President Donald Trump's "Liberation Day" tariff bombshell in early April, which sent the currency tumbling.

The labor market is softening, but overall growth is holding up, the stimulus from Trump's "One Big Beautiful Bill" should start to filter through and inflation is still well above the central bank's target rate of 2%, analysts said.

YEN WEAKENS AFTER EARTHQUAKE

The yen slid after news of a strong earthquake in Japan. Depending on the extent of the earthquake's damage, the Bank of Japan could delay an expected rate hike next week, analysts said.

The dollar rose 0.3% versus the yen to 155.97 yen , while the euro climbed 0.3% as well to 181.42 yen .

The next BOJ monetary policy meeting is scheduled for December 18-19, 2025, with the policy decision and statement expected on the second day.

In Europe, the euro was slightly lower at $1.1639. It was earlier lifted by higher euro zone bond yields. German 30-year yields hit their highest since 2011 in early trading.

Unlike the Fed, the ECB is not expected to cut rates again in the coming year. Influential policymaker Isabel Schnabel on Monday said the central bank's next move could even be a hike.

In other currencies, the Australian dollar briefly touched a high of US$0.6649, the highest since mid-September, to last trade down 0.3% at US$0.6621.

The Reserve Bank of Australia meets on Tuesday after a run of hot data on inflation, economic growth and household spending. Futures imply the next move will be a hike, possibly as soon as May.

The Bank of Canada is also widely expected to leave rates on hold on Wednesday and a hike is fully priced by December 2026. The Canadian dollar fell against the greenback, which advanced 0.3% to C$1.3850. The Canadian currency hit 10-week highs on Friday following strong jobs data.

Sterling held around $1.3327 versus the dollar, flat on the day.

Source: Reuters

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Political

The US Supreme Court signaled it’s poised to give the president control over potentially dozens of traditionally independent federal agencies as the court’s dominant conservative wing cast doubt on a 90-year-old precedent.

Hearing arguments in Washington Monday, the justices suggested they will let President Donald Trump permanently remove Rebecca Kelly Slaughter from the Federal Trade Commission despite a law that says commissioners can be fired only for specified reasons. Slaughter’s ouster would leave the consumer-protection agency without any Democratic commissioners.

Regulation opponents are seeking to achieve a long-sought goal by toppling the 1935 Humphrey’s Executor ruling. That decision upheld the FTC job protections and cleared the way for the independent agencies that came to proliferate across the federal government. Reversing Humphrey’s Executor would affect government bodies that oversee labor relations, consumer product safety, transportation safety and employment discrimination.

The court’s liberals blasted that prospect. Justice Elena Kagan said the Trump administration’s position would mean “massive, uncontrolled, unchecked power in the hands of the president.”

But the court’s six conservatives said the real concern was Congress’ creation of agencies that exercise executive power but aren’t accountable to the president. “Tomorrow we could have the Labor Commission, the Education Commission, the Environmental Commission, rather than Departments of Interior and so forth,” Justice Neil Gorsuch said.

Although a far-reaching ruling could undercut the independence of the Federal Reserve, conservative Justice Brett Kavanaugh indicated he would reinforce a carveout the court seemed to create for the central bank in May. Kavanaugh said Monday he has “concerns” about undermining the Fed’s independence.

The court next month will consider Trump’s bid to circumvent that shield by firing Fed Governor Lisa Cook for alleged mortgage fraud. Cook denies the allegations.

Critics say Humphrey’s Executor undermines the separation of powers by leaving powerful executive branch officials unaccountable to the president. Defenders say the Constitution gives Congress the flexibility to create agencies that rely on expert leadership and are insulated from political pressures.

The Supreme Court’s conservative majority has chipped away at Humphrey’s Executor in recent years.

Source: Bloomberg

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Political

China–U.S. Trade War

Mexican lawmakers are slated to begin debate this week on a bill to raise tariffs on goods from China and other Asian countries, three ruling party lawmakers told Reuters, amid fierce opposition from China and Mexican business groups.

The proposal would raise tariffs by up to 50% on imports of automobiles, textiles, clothing, plastics, steel and other products from China and other Asian countries that do not currently have a trade pact with Mexico, including India, South ‌Korea, Thailand, and Indonesia.

Mexico's Economy Ministry first outlined the proposed tariffs in September but the initiative struggled to gain widespread support in Congress, despite the ruling Morena party and its allies holding a significant majority.

President Claudia Sheinbaum's administration says the ‌measure aims to strengthen productive capacity, protect national employment and ensure that Mexico competes fairly in the global market addressing trade imbalances with China.

"During these last few years our country faced trade distortions, unfair practices, and a growing dependence on imported inputs that affected national productive sectors," said Ricardo Monreal, the lower house leader for the ruling Morena party, on social media on Friday.

The proposal would also bring an additional 70 billion pesos ($3.76 billion dollars) to state coffers, Deputy Minister for Revenues Carlos Lerma said in September as the government was preparing the measure.

Neither Sheinbaum's office nor the Economy Ministry responded to requests for ⁠comment.

A SENSE OF URGENCY TO GET IT DONE THIS YEAR

Sheinbaum met ‌privately at the National Palace with allies and legislators from her Morena party in late November and urged them to approve the bill before the end of the year, four sources familiar with the meeting told Reuters.

"The instructions were to pass it before the congressional session ends on December 15," one ‍of the sources said.

This person, like the other sources, requested anonymity to discuss sensitive political matters and a private meeting that has not been previously reported.

"There is a sense of urgency within the administration to get this done before the end of the year," the source added.

Two of the sources said that the proposal to be taken up by lawmakers this week might be softer than the original bill, which stalled in the lower house of Congress this fall in the face of intense opposition from China and business groups.

Industry associations have warned that the proposed tariffs would significantly increase production costs, given their ‌heavy reliance on Chinese imports of machinery, components, and raw materials.

In particular, the government's proposal may scale back the tariff increases on auto parts and steel products, the two sources said. Reuters was not able to ascertain the exact changes.

Mexico's automotive assembly sector, one of the largest in the world, has warned that the proposed tariffs could cut off access to essential electronic components, such as digital dashboard touchscreens, which are not produced locally.

'THE IMPACT COULD BE BRUTAL'

Looming over Mexico's sweeping tariff proposal is next year's USMCA review. Earlier this year, Mexico already stepped up tariffs on Chinese goods in what analysts said was an effort to appease Washington. But U.S. officials continue to raise concerns.

On Thursday, U.S. Trade Representative Jamieson Greer said Canada and Mexico should not be used as export ⁠hubs for China, Vietnam, Indonesia and other countries and said that this was already happening in some cases in Mexico.

Experts warn the proposed tariffs could disrupt critical supply chains at a time when Mexico's economy, the second largest in Latin America, has virtually stalled. Most at risk are electronics and automotive industries that rely heavily on Chinese parts, according to Mexico's National Autoparts Industry group.

"The impact could be brutal," said Amapola Grijalva, chair of the Mexico-China Chamber of Commerce and Technology, which represents Chinese companies operating in Mexico and Mexican ‍firms in China.

"These tariff levels would block domestic manufacturers' ⁠access to certain technologies and products that allow them to remain competitive both at home and abroad."

The proposal would also affect India, one of Mexico's growing trade partners. India supplies pharmaceuticals, textiles, chemicals and auto parts, while Mexico exports oil, copper and agricultural goods to India.

In recent months, business leaders have fiercely lobbied Mexico's Finance and Economy ministries to ⁠scrap the measure or, at the very least, remove some tariff categories and phase in the tax burden gradually.

Initially, government officials refused to budge, the four sources said. But since November, they have shown greater flexibility, the four sources ‌said, suggesting they could be open to smaller tariff increases than originally proposed or removing sensitive products from the list of more than 1,400 categories.

Source: Reuters

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Commodity

Copper rose to an all-time high after China set domestic growth as its top economic priority for next year, and amid stockpiling of the metal in the US.

The industrial metal climbed to $11,771 a ton, blazing past a record set in the previous session, before paring gains. The latest spike came after Beijing said on Monday it would stick with a “proactive” fiscal approach and maintain a “moderately loose” monetary stance for the world’s second-largest economy.

“The Politburo readouts present a more proactive macro environment than investors have expected,” said Xu Wanqiu, an analyst with Chinese brokerage Cofco Futures Co. “Copper will benefit from policy support toward power-grid upgrades, computing power. The momentum remains very bullish.” Copper Climbs to Record as China Policy, US Imports Spur Rally_1

Copper Climbs to Record as China Policy, US Imports Spur Rally_1

Trade data from China was also supportive, with exports rebounding last month to beat estimates and push the country’s trade surplus past $1 trillion for the first time.

Copper – a metal critical for electrification and the energy transition – has gained more than 30% on the London Metal Exchange this year. New demand fueled by data centers and electric vehicles has come up against tight global supply, with smelting capacity growing faster than mines can keep up. A series of mine outages has exacerbated a shortage of raw materials.

The rally has accelerated in recent weeks on concerns over an exodus of the metal to the US in anticipation that President Donald Trump will impose tariffs next year. This has squeezed inventories and sent premiums elsewhere to unprecedented highs, while also causing futures in New York to spike above those on the LME.

Global supply of refined copper could see a shortfall of 450,000 tons in 2026, partly due to this stockpiling in America, analysts from Chinese brokerage Citic Securities Co. said in a note. Prices must average above $12,000 a ton next year to attract the investment needed in new mining capacity to ensure sufficient supply in the medium- to long-term, the Citic analysts, led by Ao Chong, said.

Copper was up 0.1% to settle at $11,635.50 a ton on the LME. Other metals except zinc were lower.

Source: Bloomberg

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Political

Economic

President Donald Trump’s administration will direct agencies to cut jobs, close offices and use artificial intelligence to make the government more efficient, according to a new directive.

Those priorities, outlined in a memo posted Monday by the Office of Management and Budget, indicate Trump’s plans to press forward on the work started by Elon Musk’s Department of Government Efficiency.

Many of the goals aren’t new. But by incorporating those objectives into the President’s Management Agenda — required under a 2010 law that seeks to make government more efficient — Trump is charging the budget office with measuring progress and holding agencies accountable.

Trump’s agenda is a departure from previous documents, tying management functions to ideological goals. Those include ending diversity, equity and inclusion programs, increasing recruitment of border and immigration agents and placing political appointees in charge of grant-making.

“Removing control of the levers of government from the bureaucracy will end the push for divisive and woke policies driving DEI, gender ideology, and the green new scam,” budget director Russell Vought and deputy director Eric Ueland wrote in the memo. The directive outlines new policies “focusing government effort to deliver an America rooted in patriotism, centered on the priorities of the American taxpayer and of unlimited opportunity, not government handouts.”

The memo calls on agencies to “offload unnecessary leases and buildings,” a priority early in the administration that stalled after a short-lived effort by the General Services Administration to put major department headquarters up for a possible sale.

Trump’s agenda also prioritizes earlier efforts to give political leaders more authority over career staff, instructing agencies to “remove poor performers” and “implement all employee performance and accountability Presidential directives.”

Procurement will be consolidated, data collection streamlined and processes automated in an effort to “build a government fit for the 21st century,” according to the document.