Bitcoin ETF Exodus: Record $672M Outflow as Fed’s Rate Cut Stance Spooks Market

Institutional Investors Pull Back as Market Sentiment Shifts in Crypto Space

  • Bitcoin ETFs experienced record outflows of $671.9 million, with GBTC leading at $208.6 million.
  • Bitcoin Price dropped below $93,000, representing a 9.2% decline in 24 hours.
  • Market reaction linked to Federal Reserve’s indication of fewer rate cuts than expected.
  • Higher management fees contributing to GBTC outflows compared to competing ETFs.
  • Potential market impact anticipated with SEC Chair Gary Gensler’s departure in January 2024.

Bitcoin ETF Outflows Hit Record High Amid Federal Reserve Rate Decision

- Advertisement -

Bitcoin spot ETFs recorded their largest single-day outflow since their January launch, coinciding with the cryptocurrency’s price decline below $93,000. The movement reflects broader market uncertainty following the Federal Reserve’s latest monetary policy stance.

ETF Capital Flight Details

According to Farside Investors data, the Grayscale Bitcoin Trust (GBTC) led the Exodus with $208.6 million in outflows, while ARK 21Shares Bitcoin ETF saw $108.4 million exit. The total outflow reached $671.9 million across all Bitcoin spot ETFs.

The price of Bitcoin fell 9.2% over 24 hours, trading under $93,000, as shown by CoinMarketCap data. Market maker Wintermute noted in their investor communication that selling pressure intensified after U.S. markets opened.

Federal Reserve Impact and Market Response

The Federal Open Market Committee (FOMC) meeting results influenced market sentiment. Expectations of four rate cuts in 2025 were reduced to two, prompting investors to reduce risk exposure.

Alex Obchakevich of Obchakevich Research explains: "Investors are likely to start taking profits due to the uncertainty caused by the Fed’s policy."

Fee structures also play a role in the outflows. Ajay Dhingra, Head of Research at Unizen, points out: "Grayscale’s 1.5% annual management fee is notably higher than other ETFs, which typically charge 0.2–0.3%."

- Advertisement -

Looking ahead, market participants are monitoring the upcoming departure of SEC Chair Gary Gensler on January 20, 2024. Dhingra warns of possible market volatility, stating: "Increased regulatory scrutiny before his term ends may trigger a huge selloff."

The current market dynamics suggest investors are reassessing their cryptocurrency positions amid macroeconomic uncertainties and seeking more cost-effective investment vehicles for Bitcoin exposure.

✅ Follow BITNEWSBOT on Facebook, LinkedIn, X.com, and Google News for instant updates.

Previous Articles:

- Advertisement -

Latest

Crypto Investor Arrested Barefoot in Bathrobe After NYC Raid

Police arrested a cryptocurrency investor, John Woeltz, in New York City after allegations of kidnapping and torture.Authorities removed Woeltz from an apartment wearing only...

Judge Overturns Mango Markets Fraud Conviction Against Eisenberg

A U.S. judge overturned the fraud and market manipulation convictions of Avraham Eisenberg, who was accused of taking $110 million from Mango Markets. The court...

Helium’s DePIN Network Boosts Revenue for Small Businesses, Telecoms

Decentralized wireless network models support both small business and telecom company revenue. Nova Labs is expanding the Helium Network through collaborations with telecom firms in...

Coinbase Joins S&P 500, Marking Major Milestone for Crypto Industry

Coinbase officially became part of the S&P 500 index in May 2025, providing broader access for investors to the crypto sector. The company’s inclusion leads...

Dogecoin Shows Resilience as Bearish Channel Forms Amid Market Jitters

Dogecoin showed resilience amid broader economic uncertainty and recent price declines. The digital currency traded within a bearish channel, with resistance at $0.236 and support...

Must Read

What Is Bcrypt Password Hashing Function?

KEY TAKEAWAYSBcrypt is a password hashing function that transforms plain passwords into unique alphanumeric sequences.It is a one-way process, ensuring that passwords cannot be...