Yesterday, Bitcoin exchange-traded funds (ETFs) saw record net outflows of $671.9 million — the highest level ever reported since their launch in January.

The Grayscale Bitcoin Trust (GBTC) lost the most capital at $208.6 million, followed by the ARK 21Shares Bitcoin ETF which lost $108.4 million, according to Farside investor data. This outflow is in line with the decline in the price of Bitcoin, which is trading below $93,000 at the time of writing after a 9.2% loss over the 24 hours as of press time. According to CoinMarketCap data.

“After stabilizing early in yesterday’s session, spot prices fell after the US market opened, driven by new rounds of selling,” lead cryptocurrency market maker Wintermute wrote in a note today to investors.

The cryptocurrency market appeared to "mirror declines in stocks and bonds" as traders decided to reduce their risk exposure "ahead of the typically low-liquidity holiday season," Wintermute wrote.

the It was expected that the Fed To cut interest rates by 25 basis points to between 4.25% and 4.50% at the Federal Open Market Committee (FOMC) meeting on Wednesday, the last meeting this year.

“Heading into the FOMC meeting – widely expected to be a ‘non-event’ – the market was already showing signs of fragility,” which “translated into a downward move in the spot rate as trading markets reacted to what appeared to be a shift in ( Federal policy) the tone of Federal Reserve Chairman Jesse Powell.”

“The immediate interpretation is that the Fed has shifted toward a more neutral stance by signaling a slowdown in the pace of interest rate cuts,” Wintermute explained.

said Obchakevich Research founder Alex Obchakevich Decryption He believes that "investors are likely to start taking profits due to the uncertainty caused by Fed policy." "The market was expecting more aggressive interest rate cuts in the future, but the Fed's forecast now indicates only two interest rate cuts in 2025 instead of four," he said.

Ajay Dhingra, head of research and analytics at DeFi protocol Unizen, believes the outflows “were driven by profit-taking amid recent market volatility and a shift to lower-fee alternatives.”

“Grayscale's annual management fee of 1.5% is significantly higher than other ETFs, which typically charge 0.2-0.3%,” he stressed. Comments follow Reports this summer GBTC lost more than 348,000 BTC in just two quarters.

However, Dhingra believes there is a new impetus for Bitcoin's price to rise in the near future. “The next catalyst for Bitcoin is the departure of SEC Chairman Gary Gensler on January 20,” he said. Dhingra also raised concerns that "increased regulatory scrutiny before his term ends could lead to a massive sell-off."

Modified by Stacey Elliott.