TLDR

  • US Bitcoin ETFs experienced unprecedented single-day outflows of $672-680 million, breaking a 15-day streak of positive inflows

  • Fidelity’s FBTC led the decline with $208.5 million in outflows, followed by substantial withdrawals from Grayscale and ARK funds

  • Bitcoin price dropped below $96,000, representing a 4% decline over 24 hours amid broader market turbulence

  • Federal Reserve’s hawkish stance on future rate cuts triggered the market response, with fewer cuts planned for 2025

  • Despite the sell-off, WisdomTree’s BTCW remained positive with $2 million in inflows, while trading volume increased to $6.31 billion

The United States Bitcoin ETF market experienced its largest single-day outflow in history on December 19, 2024, as investors withdrew approximately $680 million from various funds. This massive withdrawal ended a 15-day streak of positive inflows that had brought over $6.7 billion into these investment vehicles.

Fidelity’s Bitcoin Fund (FBTC) bore the brunt of the exodus, recording outflows of $208.55 million. This marked the largest single-day withdrawal for any Bitcoin ETF since their introduction to the market. The Grayscale Bitcoin Mini Trust followed closely behind, with investors pulling out $188.6 million from the fund.

ARK 21Shares’ ARKB also faced substantial withdrawals, losing $108.35 million in a single trading session. The widespread nature of the outflows became apparent as Grayscale’s GBTC saw $87.86 million exit the fund during the same period.

The smaller players in the Bitcoin ETF space weren’t spared from the selling pressure. Bitwise’s BITB registered outflows of $43.61 million, while Invesco Galaxy’s BTCO saw $25.97 million leave the fund. VanEck’s HODL and Valkyrie’s BRRR experienced more modest outflows of $10.91 million and $8.19 million, respectively.

In a notable exception to the overall trend, WisdomTree’s BTCW managed to attract $2.05 million in new investments. This small victory stood out against the backdrop of widespread withdrawals across the sector. BlackRock’s iShares Bitcoin Trust (IBIT) and two other Bitcoin ETFs reported no changes in their flow figures for the day.

The timing of these outflows coincided with Bitcoin’s price dropping below the $96,000 mark, representing a 4.4% decline. The cryptocurrency traded at $96,751 at the time of reporting, reflecting broader market uncertainty.

Despite the substantial outflows, trading activity in Bitcoin ETFs showed increased engagement from market participants. The total trading volume reached $6.31 billion, marking an improvement from the previous day’s figure of $5.86 billion.

The catalyst for this market movement appeared to be the Federal Reserve’s latest interest rate decision and subsequent commentary. While the Fed implemented an expected 0.25% rate cut, bringing the year’s total reduction to 1%, their forward guidance proved less accommodative than many investors had hoped.

Fed officials indicated a more cautious approach to future rate cuts, announcing plans for only two additional reductions in 2025. This conservative stance contrasted with more optimistic market expectations, leading to a reassessment of investment positions across various asset classes.

The impact extended beyond Bitcoin ETFs, affecting the broader cryptocurrency market. The total crypto market capitalization experienced a 4.5% decline, settling at $3.51 trillion. This movement highlighted the interconnected nature of traditional and digital asset markets.

Ethereum ETFs also felt the effects of the market downturn, recording outflows of $60.47 million. This ended an 18-day streak of positive inflows for these funds. Grayscale’s ETHE led the Ethereum ETF outflows with $58.13 million in withdrawals.

Other Ethereum funds showed mixed results. Bitwise’s ETHW, Grayscale Ethereum Mini Trust, and Invesco’s QETH reported outflows of $6.78 million, $3.18 million, and $2.36 million respectively. However, Fidelity’s FETH and VanEck’s ETHV provided some counterbalance, attracting inflows of $5.05 million and $4.94 million.

The market’s reaction demonstrates the growing integration between traditional financial markets and cryptocurrency investments. The Federal Reserve’s monetary policy decisions now clearly influence behavior in both sectors, showing the maturing nature of digital asset markets.

Trading data revealed that institutional investors played a major role in the day’s movements. The increased trading volume suggests active portfolio rebalancing rather than passive selling, indicating strategic rather than panic-driven decisions.

Current market metrics show Bitcoin trading at $97,000, representing a 4% decrease over the past 24 hours according to the latest data. The cryptocurrency market continues to process the implications of the Federal Reserve’s policy stance, with investors adjusting their positions accordingly.

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