Bitcoin exchange-traded funds (ETFs) faced a significant sell-off on Dec. 19, reaching net outflows of a record $671.9 million, marking the largest single-day outflow event of the year.
According to Farside Investors data, the biggest outflows came from Grayscale’s GBTC, shedding $208.6 million, followed by ARK Invest’s ARKB, which fell $108.4 million.
The fallout of these outflows aligned with a decline in Bitcoin’s (BTC) price as it hovered around $96,409 and coincided with more than $1 billion being liquidated from the market in 24 hours.
Sosovalue data showed that the total net assets of Bitcoin ETFs was $109.7 billion as of Dec. 19, erasing most of the gains seen in December, which reached $121.7 billion on Dec. 17.
Related: Crypto liquidations hit $1B as traders were ‘unprepared for bad news’
Market impact of Bitcoin ETF investment outflows
The Bitcoin ETF outflows coincided with the drop in BTC price and resulted in a cumulative crypto ETF net outflow of $732.4 million, according to CoinMarketCap data.
Bitcoin dominance stood at 57.4%, continuing to hold the majority of the crypto market share despite the outflows of Dec. 19.
One analyst said the ongoing market decline may be short-lived, suggesting the market was “completely unprepared for bad news,” leading to the sharp downturn.
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At the crossroads of US politics and economic factors
The forthcoming administration of President-elect Donald Trump in the United States is expected to be pro-crypto if he follows through on his promises and helps support innovation in the industry.
This expectation has seen the BTC price break the $107,000 mark, and the crypto market has been reinvigorated as optimism and greed returned to space.
Still, while US investors anticipated a 0.25% rate cut by the US Fed, Chair Jerome Powell imparted a hawkish outlook when he indicated that only two more rate cuts were set for 2025.
The announcement also saw the S&P 500 fall, potentially resulting in the knock-on effect currently seen in crypto as uncertainty replaces greed.
Related: Is Bitcoin price going to crash again?
Buy the dip mentality peaks
Crypto analysis firm Santiment said in a Dec. 19 X post that the ratio of crypto discussions surrounding buying the dip in the market had hit its highest level in over eight months.
Despite the market turning red as Rudolph’s nose, the social dominance score, which mentions “buying the dip” across social media platforms, has hit 0.061.
This score was beaten on April 12, when BTC’s price dropped below $70,000 to around the $67,000 mark, before continuing its decline to around $63,000 on April 13.
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