Market Turmoil: Bitcoin ETFs Suffer $671.9M Outflow Amid Cryptocurrency Price Decline

Bitcoin sees $671.9M ETF sell-offs after BTC crashes below $94K

Record $671.9 million outflow from U.S. Bitcoin exchange-traded funds (ETFs) has been recorded, according to recent data from Farside Investors. This significant withdrawal occurred in tandem with a drastic 9.2% decline in Bitcoin’s value, which now stands at approximately $93,145.17.

As of December 19th, the total net assets of Bitcoin ETFs plummeted to $109.7 billion, marking a stark decrease from the reported $121.7 billion just two days prior. The abrupt downturn effectively erased most of the gains observed earlier in December, resulting in a loss of almost $12 billion.

Fidelity’s FBTC led the way in this mass exodus, surrendering $208.5 million. Grayscale’s GBTC and ARK Invest’s ARKB followed closely behind, with outflows of $208.6 million and $108.4 million, respectively. In stark contrast, BlackRock’s IBIT ETF remained stationary, experiencing neither inflows nor outflows.

Market Sell-Off Accompanies Cryptocurrency Price Drops

This unprecedented exodus from U.S. Bitcoin ETFs coincided with the swift declines in both Bitcoin and Ethereum prices. The sudden market turmoil resulted in a staggering $1 billion being liquidated across the broader crypto space within a 24-hour period.

The dominance of Bitcoin, which stands at 57.4%, has remained unshaken despite this recent turbulence. The cryptocurrency continues to maintain its position as the leading asset in the crypto market.

Federal Reserve Policy and Broader Economic Concerns

Investors are increasingly linking the sharp downturn in crypto markets to broader macroeconomic concerns. Market observers anticipated a 0.25% interest rate cut from the U.S. Federal Reserve, only for Chair Jerome Powell’s comments indicating a more cautious outlook. The hawkish tone employed by the Fed has reportedly affected traditional markets as well, with the S&P 500 experiencing a decline.

Experts speculate that this uncertainty may have further pressured the crypto market, causing investors to shift their focus away from growth assets and toward safer options.

Increased “Buy the Dip” Sentiment Amidst Market Uncertainty

Despite the tumultuous market environment, an unprecedented surge in “buy the dip” discussions has been detected across various social media platforms. Data sourced from Santiment indicates that these mentions reached their highest level in over eight months.

Source: ambcrypto.com