BTC
December 20, 2024
Bitcoin exchange-traded funds (ETFs) broke a 15-day streak of positive inflows on Thursday, recording the largest single-day outflows since their launch in January. Ethereum ETFs shared the same sentiment, breaking an 18-day streak of positive inflows.
This comes as markets continue to react to comments made by Federal Reserve Chairman Jerome Powell on Wednesday.
Bitcoin ETF Outflows Hit New High of $672 Million
According to data from Farside Investors, outflows from Bitcoin ETFs hit a new high of $671.9 million on Thursday. This surpassed the previous high of $564 million recorded on May 1, 2024.
Based on the data, Fidelity’s FBTC fund led the selling volume in the trading session on December 19 with outflows of $208.5 million. Notably, this marks the highest level of the fund’s operations since January 11, when these financial instruments first appeared on the market.
Grayscale’s BTC fund recorded $188.6 million in outflows, marking its worst performance since launch. Ark Invest’s ARKB also contributed more than $108 million to the total outflows in Thursday’s trading session. BlackRock’s IBIT fund bucked the trend, along with Franklin Templeton’s EZBC and Valkyries’ BRRR. They recorded neither outflows nor inflows.
Farside data also shows a similar trend in the Ethereum ETF market. It broke an 18-day positive inflow streak with outflows reaching $60.5 million. Crypto enthusiast Mark Collin attributes the shift to news that the Federal Reserve is not allowed to hold Bitcoin, a position that could threaten the prospects of having a Bitcoin reserve in the United States.
“It seems like all of the US Bitcoin ETFs are giving up after the news that the Fed is not allowed to hold Bitcoin. Does that mean there will be no strategic reserve fund for Bitcoin? Total net outflows -$671.9 million,” Colin shared.
In fact, during his press conference on Wednesday, Jerome Powell said that the Federal Reserve is not allowed to hold Bitcoin. This suggests that they can only advise and regulate. The Fed chairman also hinted that interest rate cuts will not continue into 2025 as previously expected. This change in rhetoric came after data showed that inflation in the United States has not cooled as Fed officials had hoped.
Given this context, the massive outflows on December 19 likely represented a reaction from Wall Street investors, with only two rate cuts expected next year.
