Last week, Bitcoin ETFs faced significant net outflows.
On December 19, Bitcoin ETFs in the U.S. experienced a record $670 million outflow, followed by nearly $300 million in net outflows on December 20. Among them, the iShares Bitcoin Trust (IBIT) led with a withdrawal of $72.7 million. These trends reflect cautious sentiment among investors amid market volatility.
Despite market turbulence, Bitcoin has shown remarkable resilience, bouncing back from $92,000 to $99,500 between December 20 and 21. This was primarily due to the favorable latest PCE data released by the U.S. last Friday, leading the market to believe that the Federal Reserve may not only have two rate cuts in 2025. Thus, it is evident that the current fluctuations in Bitcoin's price are highly correlated with the Fed's rate cut actions next year. With Trump set to take office in January, it will also be worth watching whether he can introduce more favorable policies.
Looking to 2025: Will the Trump administration introduce more favorable policies?
The upcoming Trump administration is expected to promote a cryptocurrency-friendly regulatory environment, laying the groundwork for Bitcoin's accelerated growth by 2025. This pro-crypto leader is anticipated to fill key positions in agencies like the U.S. Securities and Exchange Commission (SEC). Additionally, recently, Senator Cynthia Lummis proposed the Bitcoin Reserve Act, which suggests that the U.S. hold a reserve of 1 million BTC and aims to reduce the national debt by 35% by 2049. According to asset management firm VanEck, this measure will enable Bitcoin's price to achieve a compound annual growth rate of as much as 25%.
By 2025, Bitcoin will be more deeply integrated into the global financial system. Companies like MicroStrategy have already set a precedent for holding Bitcoin as treasury assets, while emerging markets increasingly use it as a hedge against inflation and currency instability. Bitcoin ETFs further legitimize this asset, broadening exposure for institutional and retail investors.
With increased regulatory transparency, Bitcoin's role as a bridge between traditional finance and digital innovation will be further solidified. Whether through U.S. reserves, corporate adoption, or reliance from emerging markets, Bitcoin is poised to redefine global finance in 2025, providing resilience and adaptability in a changing economic landscape.
Bitcoin's pivotal moment
In the face of record ETF fund outflows, Bitcoin's resilience underscores its adaptability and strength. As Bitcoin approaches $100,000, it is not just a short-term phenomenon but a long-term driver of financial innovation.
Looking ahead, Bitcoin will redefine global finance. Its hedging role in emerging markets, growth in institutional adoption, and potential for U.S. regulatory reform all highlight its transformative potential. While Bitcoin's price may face some obstacles in the short term, increasing signs indicate that Bitcoin may receive more support in the future.
This article discusses the nearly $1 billion outflow from Bitcoin ETFs and what market trends to expect for Bitcoin in 2025. Originally published in Chain News ABMedia.
