Spot Bitcoin exchange-traded funds (ETFs) in the United States experienced significant outflows on December 19, as Bitcoin’s price fell below $96,000. This drop coincided with a more cautious stance from the Federal Reserve regarding future interest rate cuts, which dampened investor sentiment across financial markets.
According to data from SoSoValue, the 12 spot Bitcoin ETFs collectively saw $680 million in outflows on December 19, snapping a 15-day streak of positive inflows that had previously brought in over $6.7 billion.
Leading the Outflows
Fidelity’s FBTC saw the largest outflow, with $208.55 million leaving the fund. Grayscale’s Bitcoin Mini Trust (GBTC) and ARK 21Shares’ ARKB followed closely, with outflows of $188.6 million and $108.35 million, respectively. Other notable outflows included:
- Grayscale’s GBTC: $87.86 million
- Bitwise’s BITB: $43.61 million
- Invesco Galaxy’s BTCO: $25.97 million
- VanEck’s HODL: $10.91 million
- Valkyrie’s BRRR: $8.19 million
However, WisdomTree’s BTCW stood out as an exception, attracting $2.05 million in modest inflows, while BlackRock’s IBIT and two other Bitcoin ETFs reported no changes in flows for the day.
Increased Trading Activity Amidst Outflows
Despite the outflows, trading volume in Bitcoin ETFs surged, reaching a total of $6.31 billion—up from $5.86 billion the previous day. This spike in trading activity indicates continued interest in Bitcoin ETFs, even as investor sentiment soured due to the broader market conditions.
Bitcoin Price Decline and the Fed’s Cautious Outlook
Bitcoin’s price fell by 4.4%, reaching $96,751 at the time of reporting. The decline was attributed to the Federal Reserve’s latest interest rate decision. While the Fed implemented a widely expected 0.25% rate cut, bringing the total rate cuts for the year to 1%, officials expressed a cautious outlook for the future. The Fed indicated that only two more rate cuts are likely in 2025, and inflation is expected to reach the 2% target by 2026 or 2027. This more hawkish tone dampened investor confidence, leading to a broader sell-off in the cryptocurrency market, which dropped 4.5% overall, bringing its total market capitalization to $3.51 trillion.
Ethereum ETFs Face Similar Challenges
Spot Ethereum ETFs also faced a tough day, experiencing $60.47 million in outflows, breaking an 18-day streak of positive inflows. Grayscale’s ETHE was hit hardest, with $58.13 million exiting the fund. Other Ethereum ETFs such as Bitwise’s ETHW, Grayscale Ethereum Mini Trust, and Invesco’s QETH also recorded outflows of $6.78 million, $3.18 million, and $2.36 million, respectively.
On a more positive note, Fidelity’s FETH and VanEck’s ETHV managed to attract inflows of $5.05 million and $4.94 million, helping to somewhat offset the overall negative trend. Despite the daily outflows, cumulative net inflows for Ethereum ETFs remained positive at $2.4 billion.
Ethereum’s Price Drops in Tandem with Bitcoin
Ethereum’s price mirrored the bearish sentiment in the broader cryptocurrency market, falling 8.1% over the past day to $3,378 per coin, further reflecting the market’s response to the Fed’s cautious outlook.
Conclusion
While Bitcoin and Ethereum ETFs saw significant outflows on December 19, trading volume remained robust, highlighting sustained investor interest despite the dip in prices. The cautious tone from the Federal Reserve, combined with the broader cryptocurrency market pullback, appears to have influenced investor behavior, leading to a temporary shift from inflows to outflows in both Bitcoin and Ethereum ETFs. As market conditions continue to evolve, all eyes will be on the Fed’s next moves and their potential impact on the digital asset space.
