- Investors sold $680 million worth of Bitcoin ETFs on Thursday, according to data compiled by Bloomberg.
- This is the largest daily outflow on record for Bitcoin ETFs, indicating selling pressure among traders.
- Investors were rattled after the Fed cut its rate cut forecast for next year, triggering a wave of sell-offs.
Crypto investors withdrew a record amount from Bitcoin exchange-traded funds on Thursday, as selling pressure intensified after markets recalibrated their expectations for rate cuts in 2025.
Spot Bitcoin ETFs saw outflows of $680 million on Thursday, the largest volume recorded in a single day, according to trading data compiled by Bloomberg.
Meanwhile, Bitcoin further declined, losing another 5% to trade around $96,000 on Friday morning.
These capital outflows are accompanied by a sell-off in risk assets, with traders jolted mid-week by the Fed’s updated outlook for interest rates in 2025.
The Fed’s summary of economic projections showed that officials now expect just two quarter-point rate cuts for the coming year, compared to four rate cuts projected by the central bank at its September meeting .
Popular spot Bitcoin ETFs, like Grayscale’s Bitcoin Trust ETF and Bitwise’s Bitcoin ETF, fell about 8% from open Wednesday, the day Fed officials released their news rate forecasts.
Meanwhile, Bitcoin lost around 9%. The crypto fell below $100,000 on Thursday after hitting a record high above $108,000 earlier this week.
While markets are feeling bearish overall after the Fed meeting, the fall in cryptocurrencies could also be due to seasonal profit-taking. Institutional investors will likely benefit from some of the windfall gains made by Bitcoin this year. Even after this week’s sharp decline, the top token is up over 125% year-to-date.
However, the sale could add more pressure to the market, said Joseph Dahrieh, chief executive of online broker Tickmill.
“This decline could weigh heavily on the cryptocurrency and overall market sentiment, especially as Bitcoin has fallen below the $100,000 mark, indicating potential near-term volatility and downside risks.” , Dahrieh said in a note Friday morning.
“This bearish move was driven by massive liquidations, totaling over $240 million in long and short positions in 24 hours,” Antonio Di Giacomo, senior market analyst at XS.com, said in a separate note. “The Federal Reserve’s cautious stance in announcing fewer cuts for 2025 has created an atmosphere of doubt and speculation.”
Crypto selling could continue in the near term, according to Alex Kuptsikevich, chief market analyst at FxPro. He speculated that the total market capitalization of cryptocurrencies could fall below $3 trillion, down from $3.7 trillion at the start of the month, according to data from CoinMarketCap.
“A failure below $94.5,000 would signal a break in the uptrend of the past six weeks, while a fall below $92,000 on Friday or below $93,000 by the end of the week would bring the price below the 50-day moving average in this case, time is in favor of the bears,” he said.