Yesterday, the Bitcoin Spot Exchange Traded Fund (ETF) recorded record net outflows of $671.9 million, the highest since its launch in January.
Grayscale Bitcoin Trust (GBTC) lost the most capital with $208.6 million, followed by the ARK 21Shares Bitcoin ETF with $108.4 million, according to data from Pharcyde Investors. lost. The outflow coincides with a decline in the price of Bitcoin, which is trading below $93,000 at the time of writing after falling 9.2% in 24 hours, according to data from CoinMarketCap.
“Spot prices stabilized early in yesterday’s session before turning lower after the US market opened, driven by renewed selling,” major crypto market maker Wintermute said in a note to investors today. I wrote it.
Cryptocurrency markets clearly “mirrored the decline in stocks and bonds,” Wintermute wrote, as traders decided to reduce their risk exposure “ahead of the typically illiquid holiday season.”
The Fed was expected to cut interest rates by 25 basis points at Wednesday's Federal Open Market Committee (FOMC) meeting, its last meeting of the year, to between 4.25% and 4.50%.
“Markets were already showing signs of weakness in the lead-up to the FOMC meeting, which was widely expected to be a 'no event.'” This was because “trading markets reacted to what appeared to be changes in prices. , the spot price moved lower.” [Federal Reserve Chairman Jesse] That's Mr. Powell's tone. ”
“The immediate interpretation is that the Fed has shifted to a more neutral stance by signaling a slowdown in the pace of rate cuts,” Wintermute said.
Alex Ovchakevich, founder of Ovchakevich Research, told Decrypto that he believes “investors are likely to start taking profits due to the uncertainty caused by Fed policy.” . “While the market was expecting more aggressive rate cuts in the future, the Fed's current projections are for only two rate cuts in 2025 instead of four,” he said.
Ajay Dhingra, head of research and analysis at DeFi protocol Unizen, said the outflow was “driven by recent market volatility and profit-taking against the backdrop of a shift to lower-fee alternatives.” I'm thinking.
“Grayscale's 1.5% annual management fee is significantly higher than other ETFs, which typically charge 0.2% to 0.3%,” he emphasized. The comments follow reports this summer that GBTC released more than 348,000 Bitcoins in the second quarter alone.
Still, Dhingra believes a new trigger for a Bitcoin bull market is on the horizon. “The next trigger for Bitcoin will be SEC Chairman Gary Gensler's resignation on January 20th,” he said. Mr. Dhingra also expressed concern that “increased regulatory scrutiny before the end of his term could cause huge stock price declines.”
Edited by Stacey Elliott.
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