Bitcoin sell-off: ETFs see record outflows after hawkish Fed meeting

• Investors sold $680 million worth of bitcoin exchange-traded funds on Thursday, according to data compiled by Bloomberg.
• This represents the largest daily inflow ever from Bitcoin ETFs, indicating selling pressure among traders.
• Investors were concerned after the Federal Reserve lowered its expectations for interest rate cuts next year, sparking selling.

Cryptocurrency investors have withdrawn a record amount of… Bitcoin Exchange-traded funds traded on Thursday as selling pressure intensified after markets recalibrated their expectations for interest rate cuts in 2025.

Spot Bitcoin ETFs It saw outflows of $680 million on Thursday, the largest volume ever recorded in a single day, according to trading data compiled by Bloomberg.

Meanwhile, Bitcoin extended its decline, losing another 5% to trade at around $96,000 on Friday morning.

The outflows come alongside a widespread sell-off in riskier assets, with traders wary of a mid-week Fed update. Interest rate forecasts In 2025.

The Fed’s summary of economic expectations showed that officials now see just two quarter-point cuts next year, down from four interest rate cuts the central bank expected at its September meeting.

Popular spot Bitcoin ETFs, e.g Grayscale’s Bitcoin Trust ETF and Bitwise Bitcoin ETFfell about 8% from the open on Wednesday, the day Fed officials issued their new guidance for interest rates.

Meanwhile, Bitcoin lost about 9% in that time. Encryption dropped below $100,000 on Thursday after rising to a record high above $108,000 earlier this week.

While markets are feeling broadly bearish following the Fed meeting, the crypto decline may also be due to seasonal profit-taking. Institutional investors will likely benefit from some of Bitcoin’s impressive gains this year. Even after this week’s sharp decline, the token is up over 125% year-to-date.

However, the selling may add more pressure to the market, said Joseph Dahria, managing director at online brokerage Tickmill.

“This decline may strongly impact the cryptocurrency and broader market sentiment, especially since Bitcoin has fallen below the $100,000 level, indicating potential short-term volatility and downside risks,” Dahria said in a note on Friday morning.

“This bearish move was driven by massive liquidations, totaling more than $240 million in long and short positions within 24 hours,” Antonio Di Giacomo, chief market analyst at XS.com, said in a separate note. “The Fed’s dovish stance in signaling smaller cuts for 2025 has created an atmosphere of doubt and speculation.”

The crypto sell-off could continue in the near term, according to Alex Kuptsikevich, senior market analyst at FxPro. He speculated that the total cryptocurrency market capitalization could fall below $3 trillion, down from a peak of $3.7 trillion earlier this month, according to CoinMarketCap data.

“A failure below $94.5K would indicate a break in the uptrend over the past six weeks, while a drop below $92K on Friday or below $93K by the end of the week would bring the price below the moving average.” “For 50 days, in this case, time is on the bears’ side.”