Bitcoin ETFs experienced a historic $671.9 million in net outflows on December 19, 2024. This marks the largest single-day withdrawal from Bitcoin ETFs since their launch in January. .
The outflows coincided with a sharp decline in Bitcoin’s price, which fell to $93,000, after reaching an all-time high (ATH) above $108,000 earlier in the week.
Fidelity Bitcoin ETF Leads the Way
As per Spot on Chain data, Fidelity’s Bitcoin ETF (FBTC) saw the largest withdrawal, with $208.5 million leaving the fund.
BlackRock’s Bitcoin ETF (IBIT) remained unaffected, showing no net change.
These outflows ended a 15-day streak of consistent inflows into Bitcoin ETFs and an 18-day streak for Ethereum ETFs.
The outflows were a response to Bitcoin’s recent price dip. Bitcoin had been fluctuating between $95,000 and $108,000, failing to maintain support at the $100,000 mark.
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Institutional investors, who had been fueling the recent growth, pulled back in response to the market’s volatility.
The market had been riding high, but the price correction has caused investor sentiment to shift.
On the other hand, Ethereum ETFs were also not immune to the trend. Ethereum funds also saw a decline in inflows, breaking their 18-day streak.
With Bitcoin’s drop and Ethereum’s decline, the overall crypto market felt the weight of investor caution.
BTC and ETH Prices Decline
Bitcoin price action dropped below $92,000 on Friday, recovering slightly to $94,104, marking a 7.7% daily decline and a 10% drop since Monday’s high of over $106,000.
The downturn followed the Federal Reserve’s announcement of a slowdown in interest rate cuts for 2025.
Despite the Fed’s third rate reduction of the year, which typically boosts risk assets, Bitcoin’s price fell as concerns over persistent inflation resurfaced.
The Fed’s projection of only two additional rate cuts next year, along with higher inflation forecasts, dampened market sentiment.
This has led investors to shy away from riskier assets like Bitcoin, favoring safer investments.
Ethereum price has dropped nearly 20% since peaking at $4,109 earlier this week, driven by multiple factors.
A key influence is ongoing whale selling, with large holders dumping significant amounts of ETH, including one whale who recently deposited 50,000 ETH into Binance.
This move has fueled fears of further declines. Additionally, the Ethereum Foundation’s sale of 100 ETH, part of a broader trend where it has offloaded 4,466 ETH over the past year, has added pressure on ETH price.
Furthermore, market sentiment was shaken by El Salvador’s agreement with the IMF to reduce its Bitcoin-related policies, which may have compounded the bearish sentiment around Ethereum.
Dual ETF Greenlight from SEC
In other ETF news, the U.S. Securities and Exchange Commission (SEC) approved the crypto index ETFs from asset managers Hashdex and Franklin Templeton.
The Hashdex Nasdaq Crypto Index US ETF and the Franklin Templeton Crypto Index ETF will feature a mix of Bitcoin and Ethereum, with an 80/20 average weighting, though other assets may be added later.
This approval follows filings by Hashdex and Franklin Templeton, with Nasdaq and Cboe BZX proposing rule changes to list and trade these products.
Bloomberg analyst Eric Balchunas predicts that these ETFs will launch in January 2025.
