As a seasoned analyst with over two decades of experience in the financial markets, I’ve witnessed many ebbs and flows, bull runs, and bear markets. Today’s events, however, remind me of a rollercoaster ride – steep drops followed by momentary pauses before another plunge.
On December 19, U.S.-based Bitcoin exchange-traded funds experienced withdrawals totaling approximately $680 million, as Bitcoin dipped below $96k due to the Federal Reserve’s conservative stance towards potential future interest rate decreases.
Based on information from SoSoValue, Bitcoin ETFs holding the 12th position experienced withdrawals totaling approximately $680 million last Thursday. This marked an end to a 15-day run of investments, during which over $6.7 billion had flowed into these funds.
As a crypto investor, I noticed that Fidelity’s FBTC took the lead in the recent withdrawals, with a significant sum of $208.55 million being pulled from the fund. This was followed closely by Grayscale Bitcoin Mini Trust and ARK 21Shares’ ARKB, which experienced outflows totaling $188.6 million and $108.35 million respectively. Other notable funds that saw outflows include… (Continue with the rest of the list).
- Grayscale’s GBTC: $87.86 million
- Bitwise BITB: $43.61 million
- Invesco Galaxy’s BTCO: $25.97 million
- VanEck’s HODL: $10.91 million
- Valkyrie’s BRRR: $8.19 million
In the midst of yesterday’s market downturn, my analysis reveals that while BlackRock’s IBIT and three other Bitcoin ETFs experienced no change in their inflows, WisdomTree’s BTCW bucked the trend, reporting modest inflows totaling $2.05 million.
Despite the outflows, trading activity in Bitcoin ETFs surged, with total trading volume reaching $6.31 billion, a notable increase from the previous day’s $5.86 billion.
The dip in Bitcoin’s price, which fell below $96,000 (representing a 4.4% decrease to $96,751 as reported), was mainly due to the most recent decision made by the Federal Reserve regarding interest rates.
In response to the expected quarter-point interest rate reduction (now totaling 1% for this year), Federal officials indicated they would proceed with caution regarding future cuts. They mentioned only two more potential rate reductions may occur in 2025, and inflation is projected to reach their target of 2% by either 2026 or 2027. This conservative stance from the Fed caused investor uncertainty, resulting in a decrease of about 4.5% across the broader cryptocurrency market, which at that time was valued at approximately $3.51 trillion.
Ethereum ETFs Follow Suit with Declining Momentum
Yesterday saw a difficult day for Ethereum ETFs as they experienced outflows totaling approximately $60.47 million, ending an 18-day run of inflows.
Most of the funds ($58.13 million) were withdrawn from Grayscale’s ETHE account. Additionally, smaller amounts were taken out from Bitwise’s ETHW, Grayscale Ethereum Mini Trust, Invesco’s QETH, with $6.78 million, $3.18 million, and $2.36 million respectively.
Conversely, Fidelity’s FETH and VanEck’s ETHV saw inflows totaling $5.05 million and $4.94 million respectively, to some extent counterbalancing the overall downward flow of funds.
Despite the daily outflows, cumulative net inflows for Ethereum ETFs remained positive at $2.4 billion. Ethereum’s (ETH) price reflected the bearish sentiment, dropping 8.1% over the past day to $3,378 per coin.
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2024-12-20 10:48