In just 4 days, spot Bitcoin ETFs saw a net withdrawal volume of $1.5 billion, a record. This phenomenon comes as Bitcoin, after reaching $108,000 in early December, is experiencing a 15% correction, returning to $92,000.
Large outgoing volumes of spot Bitcoin ETFs at the end of the year
At the end of 2024, the price of Bitcoin reached new heights, exceeding $108,000 at the beginning of December. However, since this high, the price seems to be taking a break, returning to around $92,000, a correction of around 15%.
The rise of BTC to such high levels can be explained in particular by the significant media coverage it has received. This was fueled by the launch of spot Bitcoin ETFs in January, but also by statements from influential figures on a global scale.
Among them, Donald Trump, president-elect of the United States, wishing to constitute a strategic reserve in BTC, and Russian President Vladimir Putin Saying Nothing and No One Can Stop Bitcoin.
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With the recent correction in the price of Bitcoin, which marks a pause after a year of frantic rise, Spot Bitcoin ETFs See Net Outflow Volume Reaching $1.5 Billionthus setting a record in just 4 days.
Spot Bitcoin ETF Volumes
Indeed, after recording a record day with $680 million in outflows, investors continued to sell their ETF shares: 277 million on Friday, 226 million on Monday, and 338 million on Tuesday, December 24.
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How to explain such withdrawals from spot Bitcoin ETFs?
Although it is impossible to determine with certainty the reasons for these exceptional volumes, we can see a certain lack of interest, probably linked to significant profit taking at the end of the year, after an increase of around 100% in the price of ETFs since August.
Price of BlackRock's iShares Bitcoin Trust ETF since August 2024
Indeed, some investment funds may be liquidating positions in order to align their year-end results.
This could also be explained by a rotation of capital towards assets deemed less risky by traditional finance, a few days after the Federal Reserve's announcement concerning the adoption of a more restrictive (hawkish) monetary policy than anticipated by investors.
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This rotation could also move towards other cryptocurrencies, such as Ether. Indeed, while the launch of the Ethereum spot ETFs was disappointing, with negative total volumes between July and November, these ETFs seem to attract more investors than those based on Bitcoin at the end of the year.
Ethereum spot ETFs thus recorded $2.46 billion in incoming volumes in less than 2 months, including around 50 million over the last 4 days.
However, after losing almost 60% of its value against Bitcoin in 2 years, it seems unlikely that Ether will be able to sustainably outperform BTC, or that the ETH/BTC ratio will reach its 2021 highs again.
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Source: SoSoValue
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First attracted by the lure of gain, I am now trapped deep into the rabbit hole. With no way out, I just have to share my knowledge and convey the passion I have for Bitcoin. I am also the creator of Adopt a Block, an educational site dedicated to Bitcoin.
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