On December 19, the cryptocurrency market experienced significant turbulence as spot Bitcoin exchange-traded funds (ETFs) in the United States registered an alarming outflow of $680 million. This downturn coincided with Bitcoin’s price plummeting below the $96,000 mark, largely driven by the Federal Reserve’s cautious stance regarding future interest rate cuts.
Data from SoSoValue revealed that the outflows from the 12 notable Bitcoin ETFs on this day halted a 15-day streak of positive inflows, which had accumulated over $6.7 billion into these investment vehicles. Notably, Fidelity’s FBTC experienced the most considerable outflow, with $208.55 million exiting the fund. Other ETFs such as the Grayscale Bitcoin Mini Trust and ARK 21Shares’ ARKB followed with outflows of $188.6 million and $108.35 million respectively.
- Grayscale’s GBTC: $87.86 million
- Bitwise BITB: $43.61 million
- Invesco Galaxy’s BTCO: $25.97 million
- VanEck’s HODL: $10.91 million
- Valkyrie’s BRRR: $8.19 million
A surprising highlight amidst the sell-off was WisdomTree’s BTCW, which attracted a modest inflow of $2.05 million. Meanwhile, BlackRock’s IBIT and two other BTC ETFs reported no changes in flows for the day, suggesting a stabilization in these investments despite significant market volatility.
The backdrop of this dramatic shift was Bitcoin itself, which fell by 4.4% to $96,751. This drop was attributed to the Federal Reserve’s recent decision to implement a 0.25% interest rate cut. While this rate cut was largely anticipated, Fed officials indicated a measured approach moving forward, forecasting only two additional cuts in 2025. This hawkish tone has fostered a bearish sentiment across the market, contributing to a 4.5% decline in the overall cryptocurrency market cap, currently estimated at $3.51 trillion.
In addition to Bitcoin, Ethereum ETFs also faced headwinds, reportedly losing $60.47 million in outflows, effectively breaking an 18-day streak of inflows. Grayscale’s ETHE led these outflows with $58.13 million leaving the fund. However, some ETFs, such as Fidelity’s FETH and VanEck’s ETHV, managed to attract positive inflows, mitigating the overall bearish trend.
These developments underscore the fluctuating dynamics of cryptocurrency investments, heavily influenced by macroeconomic policies and investor sentiment. Traders and investors are encouraged to keep a close eye on market trends and adjust their strategies accordingly as new data emerges.
