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, with the cryptocurrency market evaporating $1 billion within 24 hours.
On December 19, the U.S. Bitcoin [BTC] exchange-traded fund (ETF) saw a record single-day net outflow of $671.9 million.
This marks the largest outflow of funds since its launch, ending 15 consecutive days of inflows for the BTC ETF and 18 consecutive days of inflows for the Ethereum [ETH] ETF.
Data from Farside Investors shows that Fidelity's FBTC led the losses with a $208.5 million loss. 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, reporting no net outflows or inflows.
Market sell-offs are accompanied by declines in cryptocurrency prices.
The record outflow of funds coincided with a sharp decline in the prices of Bitcoin and Ethereum. Bitcoin dropped 9.2% in the last 24 hours, closing around $93,145.17, while Ethereum fell by 15.6%. During this period, the entire cryptocurrency market liquidated over $1 billion.
Sosovalue data shows that as of December 19, the total net assets of the Bitcoin ETF plummeted 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 solidifies Bitcoin's dominance in the cryptocurrency market, with its current share at 57.4%. Despite recent turmoil, it has maintained its position as the leading asset.
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 Chairman Jerome Powell indicate a more cautious outlook.
Powell indicated 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, with the S&P 500 index experiencing a drop. Analysts believe this uncertainty may further pressure the cryptocurrency market, as risk sentiment has shifted away from growth assets.
Market uncertainty is intensifying, and the sentiment of 'buying the dip' is strengthening.
Despite the market downturn, discussions about 'buying the dip' have surged on social media platforms. Santiment's data shows that discussions about 'buying the dip' have reached their highest level in over eight months.
This sentiment last peaked in April when Bitcoin's price fell from $70,000 to $67,000 and continued to decline thereafter.
Although some traders remain cautious, the renewed discussions suggest that some investors still hold an optimistic view of the potential recovery opportunities in the cryptocurrency market.