Renewed fears over U.S. inflation and rising bond market volatility have led to significant outflows from cryptocurrency exchange-traded funds (ETFs). Investors pulled $582 million from Bitcoin ETFs and $159 million from Ethereum ETFs on Wednesday, marking one of the largest withdrawals in these funds’ history.
Bitcoin ETFs Face Second-Largest Outflow
Data from SoSoValue reveals that 11 Bitcoin ETFs suffered a combined outflow of $582 million, just shy of the record $680 million withdrawn on December 19. Leading the decline, Fidelity’s FBTC ETF lost a record $258 million, while BlackRock’s IBIT ETF saw $124 million in withdrawals.
Ethereum ETFs also faced significant losses, with investors pulling $159.3 million. This marks the largest outflow for ETH ETFs since July 26, when $162 million exited the funds.
Macroeconomic Factors at Play
The outflows coincide with heightened macroeconomic uncertainty, including fears of inflation and Federal Reserve policies. Minutes from the Fed’s December 18 meeting highlighted concerns over the inflationary impact of incoming President Donald Trump’s policies. The central bank indicated a potential slowing of its policy-easing measures.
The bond market’s volatility and uncertainty around Federal Reserve rate cuts have also pressured risk assets, leading to Bitcoin’s price falling by 8.5% over the past three days. BTC briefly dipped to $92,500, failing to secure a position above the $100,000 psychological threshold.
Optimism on the Horizon?
Despite recent turbulence, some analysts remain hopeful. Valentin Fournier, an analyst at BRN, expects renewed momentum following the release of Friday’s nonfarm payrolls report. “The employment report will provide critical insights into the U.S. economy. We anticipate limited volatility heading into the weekend and recommend maintaining significant exposure to digital assets, with Bitcoin favored over Ethereum,” Fournier wrote in an email.
