Bitcoin exchange-traded funds (ETFs) faced a strong sell-off on December 19, achieving a record net outflow of $671.9 million, marking the largest one-day capital outflow event of the year.
According to data from Farside Investors, the largest outflows came from Grayscale's GBTC fund, which decreased by $208.55 million, followed by ARK Invest's ARKB fund, which decreased by $108.4 million.
This decline of the funds coincides with the price drop of Bitcoin (BTC) as it hovered around $96,409 and coincided with over $1 billion being liquidated from the market within 24 hours.
Data from Sosovalue shows that the total net asset value of Bitcoin ETF funds is $109.66 billion as of December 19, erasing most of the profits seen in December, which peaked at $121.68 billion on December 17.
The impact of Bitcoin ETF capital outflows on the market.
The capital outflow from Bitcoin ETF funds coincided with the price decline of BTC and led to a total net outflow of cryptocurrency ETF funds of $732.4 million, according to data from CoinMarketCap.
See also: XRP explodes 2024: Trump wins and stablecoin hopes.
Bitcoin's dominance remains at 57.4%, still holding a large share of the cryptocurrency market despite significant outflows on December 19.
An analyst suggests that the ongoing weakness may only be short-term, while also indicating that the market is completely unprepared to absorb bad news, leading to a sharp decline.
Facing the crossroads of politics and economic factors in the United States.
The upcoming administration of President Donald Trump is predicted to support cryptocurrency if the elected president fulfills his commitments and helps promote innovation in the industry.
This expectation has caused the price of BTC to surpass the milestone of $107,000, while the cryptocurrency market recovered as optimism and greed returned.
However, although U.S. investors expect the Fed to cut rates by 0.25%, Chairman Jerome Powell has created a tougher outlook as he only mentioned that there will be just two more rate cuts applied for 2025.
This announcement caused the S&P 500 to drop quickly, which may lead to noticeable repercussions in the cryptocurrency market as uncertainty replaces greed in the market.
Buying sentiment peaked when the market dropped significantly.
Cryptocurrency analytics firm Santiment noted in a post on X on December 19 that the discussion rate regarding buying during market dips has reached its highest level in over eight months.
Even as the market turned red like Rudolph's nose, the social impact score, when mentioning 'buying in when the market dips' on social platforms, reached a level of 0.061.
This score was previously surpassed on April 12 when the price of BTC fell below $70,000 to around $67,000, before continuing to drop to about $63,000 on April 13.
