Bitcoin ETF Outflow Surges to Record $672M as Price Drops Below $97K

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The crypto market in the last 24 hours has seen 361,972 traders getting liquidated, losing over $1.17 billion. This comes after Bitcoin’s price dropped 7%, hitting a low of $95,500 after achieving a historic high of $108,268, it lost about 12% of its value in just three days. US Bitcoin ETFs saw record withdrawals, with investors pulling out $672 million in a single day. This marks the largest outflow ever recorded, surpassing the previous record of $564 million set in May. The immediate catalyst was Bitcoin taking a nosedive at the critical level of $97K showing an extreme fear moment in the crypto market. 

The crypto market is in a panic situation as Trump’s policies might meet political resistance, market analysts like Arthur Hayes also predicted a severe market crash after Trump’s inauguration in January.  

Withdrawal Alert

The majority of the outflows came from, Fidelity’s FBTC led with $208.6 million in outflows, followed by Grayscale’s BTC Mini Trust at $188.6 million and Ark & 21Shares’ ARKB with $108.4 million. Grayscale’s GBTC saw $87.9 million leave, while Bitwise’s BITB saw $43.6 million exit. Furthermore, spot Ethereum ETFs also saw $60.5 million in outflows, ending an 18-day inflow streak.

What Happened?

The massive outflows are the aftermath of the US Federal Reserve’s negative stance on its recent rate cut. While the market was waiting for the Fed to complete its 100 basis, the Fed’s 0.25% drop in interest rate caused investors to panic. To make it worse, it hinted at fewer cuts in 2025, signaling a delay in regulations. Bitcoin’s price, along with other assets, saw sharp declines as traders reacted to these economic signals, leading to over $1 billion in leveraged liquidations.

Short-Term Haul?

However, the investor reaction is mixed. Since the indicators show a short-term haul, the Crypto Fear and Greed Index is still showing a “greed” level of 74, suggesting that many investors are holding on to their positions, and anticipating a recovery. Many analysts are claiming this is an overreaction to the Fed’s comment and this will be a short-term fluctuation that happens after every Fed meeting. 

What’s Next for Bitcoin and ETFs?

Looking ahead, Bitcoin’s price fluctuation is likely to continue, as global economic tensions are rising and regulatory issues are expected to delay. However, some ETFs, like WisdomTree’s Bitcoin Fund (BTCW), managed to attract new investments, indicating that not all investors are backing away.

In short, the road ahead for Bitcoin will not be easy and it might see more outflows if the Fed maintains its stance over rate cuts in 2025. In such a scenario experts suggest holding on to your assets as the market will recover soon as new ETFs may flood the market sooner or later.