As a seasoned crypto investor with a decade-long journey in this rollercoaster ride of digital assets, I must admit that the recent price correction of Bitcoin has left me a bit shaken but not stirred. The dance between bulls and bears is as predictable as the tides, yet it never fails to surprise us with its intensity.
In simple terms, over the last few days, Bitcoin has undergone a significant decrease in value, dropping approximately $13,000.
It appears that comments made by Powell at the recent FOMC meeting sparked fear among U.S. investors, causing them to withdraw approximately $670 million from Bitcoin ETFs in a single day.
Red Record
Following another 0.25% decrease in key interest rates, Federal Chair Powell indicated that there may be fewer rate reductions by 2025, given the concerning data regarding inflation. Additionally, he mentioned that the central bank is prohibited from purchasing and holding bitcoin, a point of contrast to some of Donald Trump’s pro-cryptocurrency pledges.
Straightaway, the price drop of the leading cryptocurrency was evident, falling from around $105,000 to $98,000 on Wednesday night itself. A brief surge to nearly $103,000 on Thursday was followed by bearish market control, causing a slide to a low not seen in several days, below $96,000. This rapid descent resulted in over a billion dollars worth of liquidations.
During regular American trading times, evidence from FarSide suggests that American investors did, in fact, become apprehensive about their investments in riskier assets such as Bitcoin and began withdrawing funds from Bitcoin Exchange Traded Funds (ETFs). Remarkably, December 19 saw the largest single-day outflows in the ETFs’ nearly year-long existence.
A grand total of $671.9 million was taken out from the financial instruments, with Fidelity’s FBTC and Grayscale’s BTC accounting for the largest withdrawals: a hefty $208.5 million for FBTC and approximately $188.6 million for BTC.
Despite BlackRock’s IBIT breaking numerous records and managing to avoid significant withdrawals, it failed to secure new investments, finishing the day with a balance of zero dollars.
Ethereum ETFs in Red, Too
For close to a month, Ethereum ETFs had been experiencing uninterrupted growth, marking daily inflows without a single outflow since November 21. Yet, the environment surrounding these ETFs also underwent changes, as investors withdrew a total of $60.5 million during this period.
As a researcher, I’ve observed that despite the value of Ethereum-based ETFs being significantly less than Bitcoin’s, the price decline hasn’t bypassed Ethereum. In fact, in the last 24 hours, its price has dipped by over 9%, struggling to hold steady at approximately $3,350 after facing rejection yet again at the $4,000 mark.
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2024-12-20 09:52