Bitcoin ETF outflows surge to $568M as market faces renewed volatility

• Bitcoin ETFs saw $568.8M outflows, marking the second-highest daily net withdrawal
• Ethereum ETFs resiliently closed 2024 with $35B inflows despite recent outflows

Bitcoin [BTC] Spot ETFs witnessed a significant shift in investor sentiment after three days of consistent inflows, as massive outflows totaling $568.8 million were recorded in a single day, according to Farside investors.

Bitcoin ETF update

Leading the decline was the Fidelity Wise Origin Bitcoin Fund, which experienced its largest-ever single-day outflow of $258.7 million, accounting for 45% of the total net outflow.

Ark 21Shares’ ARKB followed closely with withdrawals of $148.3 million, while BlackRock’s IBIT ETF also faced substantial outflows of $124 million.

While several other ETFs reported relatively smaller outflows, some registered no activity, reflecting a stark divergence in market behavior.

The recent Bitcoin ETF outflows marked the second-highest daily net withdrawal since their inception, trailing just $100 million behind the record $671.9 million outflow on 19 December.

This wave of outflows coincided with a significant downturn in Bitcoin’s price, with the crypto falling below $95k shortly after surpassing the $100k milestone on 07 January.

Analysts weigh in

Remarking on this massive price crash, Ryan Lee, Chief Analyst at Bitget Research told a publication, 

“Bitcoin’s dip stems primarily from strong US economic data pointing toward potential interest rate hikes.”

Interestingly, the Crypto Fear & Greed Index, a key barometer of market sentiment for Bitcoin and other cryptocurrencies, also shifted from “Extreme Greed” to “Greed” over the past month, with the score dropping from 78 to 69.

This decline is a sign of tempered optimism among market participants amid recent price fluctuations.

Despite the index signaling strong positive sentiment, some traders have been cautious against drawing definitive conclusions. They believe that Bitcoin’s price volatility may not yet offer a clear direction for the market’s next move.

Remarking on the same, in a 9 January X post, Daan Crypto Trades said, 

“This doesn’t say much yet, especially seeing December broke the trend and the start of the year is generally very choppy.”

Ethereum ETF to surpass Bitcoin ETF?

While Bitcoin ETFs dominate market activity, Ethereum [ETH] ETFs are steadily closing the gap, underscored by their impressive $35 billion inflows in 2024, despite recent outflows of $159.4 million.

Crypto analyst Lark Davis’ prediction of ETFs potentially holding 10-20% of Bitcoin’s supply during peak cycles fuels concerns over a supply crunch, but Ethereum’s resilience and growing investor confidence signal a shift.

Therefore, if these trends persist, 2025 could herald a pivotal moment, potentially positioning Ethereum ETFs as leaders in the crypto investment landscape.