BlackRock’s IBIT Bitcoin ETF has sold nearly 100,000 BTC in recent months to meet redemption requests, and now holds just over 733,000 BTC, with the price of Bitcoin up nearly 10% since falling to lows of less than $57,000 in early July 2026, more than 50% from its October 2025 all-time high above $126,000.
In this draw, Eric Balchunas, senior ETF analyst at Bloomberg Intelligence, published what amounts to a structural diagnosis: The 22-year history of gold ETFs is the most instructive precedent available to anyone who owns a bitcoin ETF today.
Bitcoin ETFs Likely to Reflect Gold’s History of Triumph and Pain.. New from me on how the 22-year history of gold ETFs could offer the closest roadmap yet for Bitcoin ETF investors. Both are a wrap around non-returning stores of value that generate no cash flow, leaving the investor… pic.twitter.com/3C4tZYPLCp
– Eric Balchunas (@EricBalchunas) July 17, 2026
This is not just an observation of turbulent markets. It is an argument about the structural mechanisms that govern non-yielding, sentiment-driven asset envelopes – and what these mechanisms have historically meant for investor patience and cycle outcomes.
The analytical question is no longer whether Bitcoin ETFs will face painful drawdowns; Rather, it is whether investors realize that gold’s roadmap went through an eight-year slump before hitting successive new highs.
Mechanism: Why non-yield wrappers follow sentiment, not fundamentals
Balchunas noted in a July 17 Bloomberg article that both the GLD and Bitcoin ETFs are “wrapped around non-yielding stores of value,” with their performance based on investor sentiment rather than cash flows.
This means that price movements can be volatile, reacting quickly to changes in demand without an underlying valuation anchor. GLD briefly became the world’s largest ETF in 2011 but has struggled for years to regain that status.
He compared this to IBIT, highlighting how demand can fluctuate rather than remain constant. Since its launch in January 2024, the US Bitcoin ETF has seen around $38 billion in net inflows, making it one of the fastest-growing funds ever launched.
Meanwhile, the gold market cap has reached nearly $28 trillion since gold ETFs were introduced in 2004, providing long-term optimism amid short-term challenges.
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Institutional Demand: The stable variable in the current drawdown of a Bitcoin ETF
IBIT recovery data is a crucial near-term stress indicator, with Wall Street analysts noting that ETF inflows are vital to any price recovery. IBIT sold nearly 100,000 BTC to satisfy redemption requests, highlighting the rapid impact of sentiment-driven outflows in a challenging macro environment. Bitfinex analysts warned that further outflows could jeopardize the recent recovery.
Simon Peter Masbani of XS.com stressed that institutional demand is stronger than the flow data suggests. He stated that spot Bitcoin ETFs continue to attract stable investments, which helps alleviate selling pressure during market declines.
This distinction supports Balchunas’ hypothesis that institutional investment in Bitcoin ETFs may be more stable than retail flows, which could lead to a shorter, shallower drawdown than the eight-year gold slump. However, BlackRock’s IBIT ongoing recovery cycle has yet to provide a conclusive answer.
High Water Mark Thesis: Every golden cycle sets a new high
$ Bitcoin She tried to recover $65,000 but failed again.
As long as Bitcoin stays below this level, sellers will be in control. pic.twitter.com/df03eygBdP
– Ted (@TedPillows) July 20, 2026
Balchunas’s framework is optimistic in the long term while acknowledging the challenges in the short term. He believes each gold ETF cycle has raised the high-water mark, suggesting that Bitcoin’s recent decline from over $126,000 is a temporary correction rather than a long-term decline.
The key question for crypto ETF participants is whether the current demand lull will be resolved by a macro catalyst, such as a shift from the Fed, or whether it will lead to a post-2012 GLD-like recession.
While BTC’s recovery from below $57,000 is in line with Balchunas’ expectations, she has yet to confirm it. Gold precedent shows that a lack of return is not a serious flaw; Instead, emotions are key and recover on their own timetable.
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Daniel Francis is a technical writer and Web3 educator specializing in macroeconomics and DeFi mechanics. A crypto native since 2017, Daniel brings his background in cross-chain analytics to author evidence-based reports and detailed guides. It is certified by the Blockchain Council and is dedicated to providing “information gain” that cuts through the market noise to find blockchain’s real-world utility.
