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Bitcoin Spot ETFs Face Record Outflows Amid Federal Reserve's Cautious Stance

A sharp rise in ETF outflows reflects investor uncertainty over the Fed's interest rate decisions and the broader economic landscape.
By: Jona Jaupi • December 20, 2024
Bitcoin Spot ETFs Face Record Outflows Amid Federal Reserve's Cautious Stance

Bitcoin (BTC) spot exchange traded-funds (ETFs) recorded $672 million in outflows on Dec. 19, the largest single-day sell-off since launching earlier this year, following the Federal Reserve's latest policy moves.

This sharp withdrawal marks a 335% drop from the $275 million in inflows BTC spot ETFs recorded on Dec. 18, according to SoSo Value data.

Ethereum (ETH) spot ETFs also experienced a significant withdrawal, with outflows of $60.47 million on Dec. 19, from the $2.45 million in inflows the day prior.

Outflows follow the Federal Reserve's recent interest rate cuts and its cautious outlook on further cuts for 2025. This combination has led to increased uncertainty in the markets, causing investors to pull back on risk assets and reassess their positions

“The primary catalyst in the recent wave of crypto ETF outflows was the decidedly hawkish shift in Federal Reserve policy, which caused sharp corrections in both financial markets and institutional sentiment,” said Todd Ruoff, CEO of Autonomys. “Despite a 0.25% rate cut, Fed Chair Jerome Powell’s cautious future outlook and ongoing inflation concerns sparked broad market sell-offs.”

James Toledano, Chief Operating Officer at Unity Wallet, said to The Defiant that it’s also not uncommon for investors to take profits as the year draws to a close.

“I think that is why we have seen Bitcoin trading volumes rise 24% in the last day and Bitcoin ETF outflows hit a record $672 million in one day,” he said. “It’s essentially profit-taking and asset juggling at play.”

Spot ETF inflows and outflows

On Dec. 19, Fidelity’s FBTC accounted for the largest BTC spot ETF outflows, totaling $208 million. Grayscale Bitcoin Mini Trust(BTC) and ARK and 21Shares’ ARKB followed with recorded outflows of $189 million and $108 million, respectively. Notably, WisdomTree Bitcoin Trust (BTCW) was the only fund to attract BTC Spot ETF inflows of $2.05 million.

ETH spot ETFs largest outflows were recorded by Grayscale’s ETHE, which totaled $58 million. Bitwise’s ETHW and the Grayscale Ethereum Mini Trust (ETH) also faced outflows totaling $6.8 million and $3.81 million, respectively. In contrast, Fidelity Ethereum Fund(FETH) and the VanEck Ethereum Trust(ETHV) attracted inflows of $5.05 million and $4.9 million, respectively.

BTC and ETH price drop

BTC and ETH prices have also dropped in recent days. BTC today fell to just above $97,000, a 10% decrease from its all-time high of around $108,000 on Tuesday. ETH’s price dropped 11%% in the last week to its current price of $3,472, according to CoinGecko data.

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