Due to the plummeting cryptocurrency prices, the Bitcoin ETF faced an outflow of $671.9 million, ending a streak of 15 consecutive days of outflows.
Fidelity and Grayscale led the ETF sell-off, causing the cryptocurrency market to evaporate $1 billion within 24 hours.
The U.S. Bitcoin [BTC] exchange-traded fund (ETF) experienced a record single-day net outflow of $671.9 million on December 19.
This is the largest outflow of funds since launch, ending 15 consecutive days of inflows for the BTC ETF and 18 consecutive days for the Ethereum [ETH] ETF.
Data from Farside Investors shows that Fidelity's FBTC led the losses with $208.5 million lost. Grayscale's GBTC and ARK Invest's ARKB followed closely, with outflows of $208.6 million and $108.4 million, respectively.
In contrast, BlackRock's IBIT ETF remained unchanged, with no reported net outflows or inflows.
The market sell-off accompanied by the decline in cryptocurrency prices
The record outflow of funds coincided with a sharp drop in the prices of Bitcoin and Ethereum. Bitcoin fell 9.2% in the past 24 hours, closing around $93,145.17, while Ethereum dropped 15.6%. During this period, over $1 billion was liquidated across the cryptocurrency market.
Sosovalue data shows that as of December 19, the total net assets of the Bitcoin ETF fell from $121.7 billion two days prior to $109.7 billion, significantly shrinking and erasing most of the gains made in early December.
This sell-off has solidified Bitcoin's dominance in the cryptocurrency market, currently holding a 57.4% share, maintaining its position as the leading asset despite recent turbulence.
Federal Reserve policy and broader economic issues
The sharp decline in the cryptocurrency market is also related to broader macroeconomic concerns. Investors expect the Federal Reserve to cut rates by 0.25%, but comments from Fed Chair Jerome Powell suggest a more cautious outlook.
Powell stated that there may only be two rate cuts in 2025, suggesting that the pace of monetary easing will be below expectations.
The Federal Reserve's hawkish sentiment has also affected traditional markets, leading to a decline in the S&P 500 index. Analysts believe that this uncertainty may further pressure the cryptocurrency market as risk sentiment has shifted away from growth assets.
Market uncertainty has intensified, and the sentiment of 'buying the dip' has strengthened.
Despite the sluggish market, discussions about 'buying the dip' on social media platforms have surged. Data from Santiment shows that discussions about 'buying the dip' have reached their highest level in over eight months.
This sentiment peaked last in April when Bitcoin's price fell from $70,000 to $67,000, before continuing to decline.
Despite some traders remaining cautious, the renewed discussions suggest that some investors are still optimistic about the potential recovery opportunities in the cryptocurrency market.