- U.S. Bitcoin ETFs record $1.2 billion in outflows over three consecutive trading days.
- Ethereum ETFs largely stable, with net outflows of just $5 million during the same period.
What happened: Bitcoin ETFs face largest outflow streak in years
U.S.-based spot Bitcoin ETFs have seen nearly $1.2 billion in outflows over three consecutive trading days, according to SoSoValue data. This marks the longest streak of outflows since the 2020 re-election of Donald Trump. The funds, which held a peak value of $121.7 billion on December 16, saw their combined value drop by $10.7 billion by December 23, settling at $105 billion. While major funds like Fidelity’s FBTC shed $426 million, some, such as BlackRock’s IBIT, showed resilience with minimal activity.
Ethereum ETFs, on the other hand, experienced a much calmer period, trading sideways with a net outflow of only $5 million. While ETH’s price rose 5% within 24 hours, Bitcoin also rebounded by nearly 6%, possibly indicating an end to the outflow streak. Nonetheless, the outflows erased much of Bitcoin ETFs’ inflow gains from early December.
Also read: What is Bitcoin?
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Why it’s important
The significant outflow from Bitcoin ETFs highlights a marked shift in investor sentiment within the cryptocurrency sector, potentially driven by macroeconomic uncertainties such as inflation fears, interest rate hikes, and increasing regulatory scrutiny. Bitcoin ETFs, once heralded as a stabilising bridge between traditional finance and digital assets, now face scepticism as substantial outflows cast doubt on their reliability and resilience as investment vehicles. These developments come against the backdrop of a surprising rebound in Bitcoin and Ethereum prices, suggesting that both institutional and retail investors are reassessing their strategies in response to heightened market volatility and evolving market conditions.
Moreover, the divergence between Bitcoin and Ethereum ETFs underscores distinct dynamics within the cryptocurrency market. While Bitcoin ETFs faced significant outflows, Ethereum funds demonstrated relative stability, reflecting varied levels of investor confidence in these digital assets. This divergence sheds light on broader market sentiment, highlighting the need to closely monitor the role of ETFs as the industry continues to bridge traditional finance and digital innovation.
