Bitcoin ETFs saw a record $680 million outflow on Thursday, marking the largest single-day withdrawal since their approval in January. This significant movement coincided with investors adjusting expectations for Federal Reserve interest rate cuts in 2025. Amid this outflow, Bitcoin’s price fell by 5% to close the week at approximately $97,400, continuing its retreat from the $108,000 high reached earlier this month.
The Federal Reserve’s revised guidance, released earlier this week, outlined only two expected quarter-point rate cuts in 2025, down from the four cuts projected in September. This cautious outlook contributed to a broader sell-off across risk assets, including cryptocurrencies.
Grayscale and Bitwise ETFs See 8% Decline
Major Bitcoin ETFs, including Grayscale’s Bitcoin Trust and Bitwise’s Bitcoin ETF, recorded an 8% decline following the Fed’s announcement. Meanwhile, Bitcoin’s value has dropped by roughly 9% over the same period, reflecting heightened market uncertainty. The outflows on Thursday ended a streak of 15 consecutive days of inflows for U.S. Bitcoin ETFs, which had accumulated a net inflow of $5.3 billion during this period.
Despite these challenges, Bitcoin briefly recovered to around $100,000 after falling to $92,000. Analysts attribute this sell-off partially to the Fed’s cautious stance and seasonal profit-taking by institutional investors.
Market Analysts Warn of Prolonged Sell-Off
The recent sell-off may signal continued volatility in the cryptocurrency market. Joseph Dahrieh, managing principal at Tickmill, noted, “Breaking below $100,000 heightens downside risks and short-term volatility for Bitcoin.” This sentiment was echoed by Antonio Di Giacomo, senior market analyst at XS who highlighted the impact of $240 million in liquidations across both long and short positions within a 24-hour window.
Looking ahead, Alex Kuptsikevich, chief market analyst at FxPro, warned that total cryptocurrency market capitalization could drop below $3 trillion from its recent $3.7 trillion peak. He added, “A failure to hold above $94,500 could break the six-week uptrend, with a drop below $92,000 signaling further bearish pressure.”
Key Takeaways:
- Bitcoin ETFs experienced a record $680M outflow as investors recalibrate expectations for Fed rate cuts in 2025.
- Bitcoin has fallen approximately 9%, trading near $97,400 after briefly dipping to $92,000.
- Analysts caution that a drop below $92,000 could intensify bearish sentiment and disrupt the broader uptrend.