Bitcoin ETFs faced net outflows of $671.9 million, ending a 15-day increase as cryptocurrency prices plummeted.
Fidelity and Grayscale led the ETF sell-off as $1 billion was liquidated in the cryptocurrency market within 24 hours.
On December 19, the Bitcoin [BTC] exchange-traded fund in the U.S. experienced record high net outflows, reaching $671.9 million in a single day.
This is the largest outflow since its launch, ending a 15-day inflow streak for the BTC ETF and an 18-day streak for the Ethereum ETF [ETH].
Data from Farside Investors shows that Fidelity's FBTC led the outflows, losing $208.5 million. Grayscale's GBTC and ARK Invest's ARKB followed with outflows of $208.6 million and $108.4 million, respectively.
In contrast, BlackRock's IBIT fund remained unchanged, with no net inflows or outflows.
Market sell-off accompanied by falling cryptocurrency prices
Record outflows coincide with a significant drop in Bitcoin and Ethereum prices. Bitcoin fell 9.2% in the last 24 hours, hovering around $93,145.17, while Ethereum experienced a sharper shock with a 15.6% drop.
Over $1 billion has been liquidated in the cryptocurrency market during this period.
Data from Sosovalue shows that the total net assets of the Bitcoin ETF dropped to $109.7 billion on December 19, down from $121.7 billion just two days prior. This sharp decline wiped out most of the gains seen earlier in December.
The sell-off reinforces Bitcoin's position in the cryptocurrency market, with a dominance rate at 57.4%, maintaining its status as the leading asset despite recent volatility.
Federal Reserve policy and broader economic concerns
The severe downturn in the cryptocurrency market is also linked to broader macroeconomic concerns. Investors are anticipating a 0.25% rate cut from the U.S. Federal Reserve, but comments from Fed Chair Jerome Powell suggest a more cautious outlook.
Powell stated that only two rate cuts could occur in 2025, implying a slower pace of monetary easing than expected.
The Fed's hawkish stance is also impacting traditional markets, with the S&P 500 index declining.
Analysts believe this instability may have put additional pressure on the cryptocurrency market, as risk sentiment shifts away from growth assets.
Increased 'buy the dip' activity amid uncertain market conditions
Despite the market downturn, the 'buy the dip' frenzy surged on social media platforms. Data from Santiment shows mentions of 'buy the dip' reaching their highest level in over eight months.
Source: X
The last time this sentiment peaked was in April, when Bitcoin's price fell from $70,000 to $67,000 before continuing to decline.
While some traders remain cautious, these new discussions suggest that a segment of investors is still optimistic about potential recovery opportunities in the cryptocurrency market.
