Spot Bitcoin exchange-traded funds saw a sharp decline in inflows on January 7, with Bitcoin falling 5%, driven by rising expectations of a more hawkish approach from the Federal Reserve.

Bitcoin, the world's largest cryptocurrency, rose to more than $102,000 yesterday, sparking renewed optimism among investors who expect the market to rise before the next inauguration of President-elect Donald Trump.

However, the gains were short-lived, as Bitcoin fell by 5.7% in 24 hours, weighed down by the drop. US bond yields rise He warned investors ahead of key economic updates, including Federal Reserve meeting minutes and non-farm payrolls data.

The increase in bond yields has fueled expectations of a more hawkish stance from the Federal Reserve. Officials have already indicated plans to cut interest rates just twice in 2025, less than previously expected. Investors are now awaiting the minutes of the Fed's meeting, scheduled for release on Wednesday, January 8, for more clarity on policymakers' deliberations.

Further pressure on Bitcoin came from a US Department of Labor report that revealed job openings rose to the highest level in six months, driven by growing demand in the services sector.

It precedes the non-farm payrolls report scheduled for release on Friday. A stronger-than-expected jobs report may bolster expectations of prolonged Fed tightening, as a resilient labor market may continue to fuel inflationary pressures.

Bitcoin ETF inflows drop by 94%

Bitcoin's price decline led to inflows of just $52.9 million across the 12 Bitcoin ETFs on January 7, as expectations of a hawkish stance from the Federal Reserve dampened risk sentiment among investors. Notably, this figure represents a 94% decline compared to inflows of $987 million registered The day before.

according to Data From SoSoValue BlackRock's IBIT was the only BTC ETF to record an inflow on Tuesday. The asset manager's spot Bitcoin ETF attracted $596.11 million in inflows that managed to offset the mass outflows seen from other BTC ETFs.

21Shares' ARK and ARKB recorded the highest outflows of the day with $212.55 million exiting the fund. Grayscale's Bitcoin ETFs designated GBTC and BTC also contributed to the negative momentum with outflows of $125.45 million and $113.85 million, respectively.

Fidelity's FBTC reported an outflow of $86.29 million while Franklin Templeton's EZBC saw a more modest outflow of $5.58 million. The remaining BTC ETFs saw “0” inflows during the day.

Meanwhile, the daily trading volume of these investment products reached $4.62 billion on January 7, compared to $3.96 billion seen the previous day.

At the time of publication Bitcoin (Bitcoin) was traded at $96,145 per coin.