On December 19, spot Bitcoin exchange-traded funds (ETFs) in the United States experienced a significant setback, recording $680 million in outflows as Bitcoin’s price fell below $96,000. The decline followed the Federal Reserve’s latest cautious stance on future interest rate cuts, leading to a bearish sentiment in the market.
Data from SoSoValue revealed that the 12 spot Bitcoin ETFs combined saw $680 million in outflows, ending a 15-day inflow streak that had brought in over $6.7 billion. Leading the outflows was Fidelity’s FBTC, which lost $208.55 million, followed by Grayscale Bitcoin Mini Trust and ARK 21Shares’ ARKB, with outflows of $188.6 million and $108.35 million, respectively. Other notable outflows included:
- 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
However, WisdomTree’s BTCW bucked the trend, attracting a modest $2.05 million in inflows. BlackRock’s IBIT and two other Bitcoin ETFs reported no changes in flows.
Despite the outflows, overall trading activity in Bitcoin ETFs surged, with the total trading volume reaching $6.31 billion, an increase from the previous day’s $5.86 billion.
The decline in Bitcoin’s price, which dropped 4.4% to $96,751, was attributed to the Fed’s decision to cut interest rates by 0.25%, marking the third rate reduction of the year. While this was in line with market expectations, the Fed’s cautious outlook on future rate cuts and inflation projections dampened investor sentiment. As a result, the broader cryptocurrency market saw a 4.5% drop, with its total market capitalization standing at $3.51 trillion.
Ethereum ETFs also faced challenges on the same day, logging outflows of $60.47 million, ending an 18-day inflow streak. Grayscale’s ETHE accounted for the majority of the outflows, losing $58.13 million, while Bitwise’s ETHW, Grayscale Ethereum Mini Trust, and Invesco’s QETH also recorded outflows.
In contrast, Fidelity’s FETH and VanEck’s ETHV managed to attract inflows of $5.05 million and $4.94 million, respectively. Despite the daily outflows, Ethereum ETFs still reported cumulative net inflows of $2.4 billion. Ethereum’s price mirrored the broader market downturn, dropping 8.1% to $3,378 per coin.
The cautious tone of the Fed has cast a shadow over both Bitcoin and Ethereum markets, contributing to a period of uncertainty and heightened market volatility.
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