Bitcoin experienced a major decline following Fed Chairman Jerome Powell’s comments that interest rate cuts could be slower in 2025.$BTC
Bitcoin, which was at $108,000 before Powell's speech, lost more than 15 percent of its value after the statements, falling to $92,000. Although there was a small recovery on Friday, larger losses were generally observed in the cryptocurrency market.
“I was expecting this kind of decline more in January,” said Aurelie Barthere of Nansen Research.
“The Fed’s tougher stance and political uncertainties regarding the US budget shutdown are among the main factors triggering this sell-off,” Barthere explained. He also noted that the correction in the market is progressing orderly and there is no panic, and trading volumes confirm this situation. “This shows that investors are focusing on the opportunity to buy at the bottom. After cryptocurrencies outperformed other financial assets in early November, such a correction is normal and healthy,” the cryptocurrency researcher commented.
Spot Bitcoin ETFs in the U.S. saw net outflows totaling $680 million on Thursday, ending a 15-day trend of $6.7 billion in positive flows.
The previous record was recorded with an outflow of $563.7 million on May 1, when Bitcoin fell to $56,000. Currently, unlike BlackRock, Fidelity’s FBTC fund stands out with an outflow of $208 million, while Grayscale’s Bitcoin Mini Trust experienced an outflow of over $188 million.
BlackRock’s IBIT fund was surprisingly neutral, while WisdomTree’s BTCW was the only ETF to close the day positive, recording a net inflow of $2 million. During this sell-off, the total trading volume of 12 spot Bitcoin ETFs rose from $5.9 billion to $6.3 billion.
The U.S. Securities and Exchange Commission (SEC) has approved the crypto-indexed ETF applications from Hashdex and Franklin Templeton on the Nasdaq and Cboe BZX exchanges. Initially, these funds will hold Bitcoin and Ethereum. Hashdex plans to add other crypto assets such as AVAX, LINK and LTC to the fund in the future. Bloomberg analyst Eric Balchunas said the new ETFs will likely be launched in January, adding, “80 percent of the portfolios will be Bitcoin and 20 percent will be Ethereum-heavy. It’s quite remarkable that Hashdex and Franklin are at the forefront of this.”
“Whether big companies like BlackRock will launch similar products is a matter of curiosity. But regardless, I expect demand for these products to be strong. Investors are eager to diversify their portfolios, especially in classes like emerging cryptocurrencies,” said Nate Geraci, President of The ETF Store.
Bitcoin's market value is currently trading at $98,900.