Bitcoin ETF

US Spot Bitcoin ETFs Face Record Outflows as Market Pullback Weighs on Investor Sentiment

The US Spot Bitcoin ETF’s impressive 16-day inflow streak came to an end this week as the broader crypto market experienced a significant pullback. This downturn led to notable outflows in prominent Bitcoin ETFs, with BlackRock’s Bitcoin ETF (IBIT) and Fidelity’s FBTC recording their largest declines ever, fueling investor concerns.

BlackRock Bitcoin ETF (IBIT) Faces Record Outflow

The latest market crash has shaken investor confidence, reflected in the considerable outflows from US Bitcoin ETFs. The BlackRock Bitcoin ETF (IBIT) witnessed its highest outflow of $72.7 million on December 20, 2024, marking a sharp contrast to its previous inflows. This followed a significant $208.5 million outflow from Fidelity’s FBTC, which also experienced its largest outflow since its launch in January 2024. Collectively, the US Spot Bitcoin ETFs saw a staggering $671.9 million in outflows on December 19, followed by another $277 million on December 20.

US Spot BTC ETF BlackRock Bitcoin ETF
Source: Farside Investors

This outflow trend comes amid a volatile period for Bitcoin, which had reached an all-time high of $108K earlier this month, buoyed by optimism around the US Bitcoin Strategic Reserve. Meanwhile, global leaders, particularly in Europe, have hinted at similar strategic moves, creating a wave of optimism about Bitcoin’s long-term prospects.

Institutional Sentiment Shifts Despite Strong Corporate Support

Despite these outflows, Bitcoin remains a key focus for major corporations. Companies like MicroStrategy continue their aggressive BTC buying strategies, showcasing growing confidence in Bitcoin’s future. Additionally, Bitcoin miners such as MARA and Hut 8 have bolstered their holdings, suggesting long-term faith in the asset. However, the recent pullback in Bitcoin ETFs signals potential concerns regarding investor sentiment, particularly among institutional players.

What’s Next for Bitcoin?

The outflows from Bitcoin ETFs, coupled with recent hawkish remarks from the US Federal Reserve, have raised questions about the near-term outlook for the cryptocurrency. The Fed’s 25 basis point rate cut, paired with hints of further tightening, has triggered a broader financial market decline, with Bitcoin not spared from the pullback.

Source: CMC Data

However, despite the recent slump, experts remain optimistic about Bitcoin’s long-term trajectory. Bitcoin surged nearly 5% on December 21, reaching $98,431, bouncing back from a low of $92,175. Yet, Bitcoin Futures Open Interest remained flat, indicating that investors are cautiously watching the market before committing to significant positions.

Also Read: Bitcoin ETFs See Record $671.9M Outflow Amid Market Turmoil—Is a Recovery on the Horizon?

The current market turbulence may be short-lived, but the evolving dynamics surrounding Bitcoin ETFs and institutional interest will likely shape the future path of Bitcoin.

Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.

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