Is the $671M Bitcoin ETF outflow the start of something bigger?

The US Bitcoin Exchange Traded Funds (ETFs) hit their largest net outflow of $671.9 million. Fidelity’s FBTC led the charge with a record $208.5 million outflow, while BlackRock’s IBIT stood steady with a $0 net flow. This outrush has marked a major shift in the market after watching 15 days of BTC inflow streak.

The global digital assets market witnessed a drop of more than 6% in the last 24 hours as Bitcoin and major altcoins printed heavy red indexes. The cumulative crypto market cap stands at $3.3 trillion with a trading volume of $275 billion. However, the fear and greed index is still flashing ‘Greed’ on the radar.

Bitcoin ETFs bleed

As per the SosoValue data, Grayscale’s Bitcoin Trust (GBTC) reported a withdrawal of $87.86 million, and Ark’s ARKB noted $108.4 million in outflows. GBTC’s total outflow stands at a massive $21.24 billion. Grayscale’s mini BTC fund saw $188.6 million of outflow while Bitwise’s BITB reported a withdrawal of $43.6 million.

The largest spot bitcoin ETF by net assets, BlackRock’s IBIT, reported zero flows among the rest of the funds. Meanwhile, WisdomTree’s BTCW turns out to be the only fund among all the BTC ETFs to record positive flows of $2 million. The total trading volume of 12 spot bitcoin ETFs hit $6.3 billion on Thursday. Total net assets under all funds stood at $109.66 billion which is 5.74% of Bitcoin’s market cap.

The Bitcoin price dropped by around 8% in the last 24 hours dragging down its bullish run. Despite smashing all the records, BTC is down by 4.8% over the past 7 days. Bitcoin is trading at an average price of $95,242, at press time.

The selloff wasn’t limited to Bitcoin ETFs as Ethereum linked ETFs also broke their 18-day inflow streak. ETH linked funds reported an outflow of over $60 million on Thursday, breaking all the positive records. Grayscale’s ETHE is still the biggest Ether ETF with $4.81 billion under its belt.

Ether is also dealing with the same sell-off sentiments. ETH price dropped by 15% over the last 7 days and is down by a massive 10% in the last 24 hours. Ether is trading at an average price of $3,284, at press time.

What triggered the crash? 

The Federal Reserve’s hawkish tone at the Federal Open Market Committee has shaken the markets. The constant brewing inflation pushed the Fed to signal 2 rate cuts in 2025. It is down from the market’s expectation of 3 and has dampened investor enthusiasm. It has also sparked a selloff across risk assets.

The Fed’s shift isn’t the only factor as experts suggest that year-end profit-taking could also be playing a role. For now, Bitcoin remains resilient, doubling in value this year amidst ETF inflows and market optimism.

With fewer rate cuts expected for 2025, some investors are opting to reduce exposure and take profits. Momentum has cooled, but the market is far from done.

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