Recent developments in Bitcoin’s price have resulted in a significant correction, with a drop of approximately $13,000.
Investors in the U.S. have reacted to remarks made by Chairman Powell during the latest FOMC meeting, leading to a withdrawal of over $670 million from spot Bitcoin ETFs within a single day.
Alarming Figures
Following an additional 25 basis point cut to key interest rates, Powell cautioned that the Federal Reserve may not implement as many reductions in 2025 due to concerning inflation statistics. Compounding the challenges for Bitcoin and other altcoins, he remarked that the central bank is prohibited from purchasing and holding Bitcoin, a stance that contradicts one of Donald Trump’s numerous pro-crypto assertions.
The market responded swiftly, as Bitcoin’s price plummeted from more than $105,000 to $98,000 late Wednesday. After a brief rally to nearly $103,000 on Thursday, bearish sentiment took hold, driving the price down to a multi-day low of under $96,000, resulting in over a billion dollars in liquidations.
This shift coincided with U.S. trading hours. FarSide’s data confirms that American investors became wary regarding riskier investments like Bitcoin and started to divest from Bitcoin ETFs. Notably, December 19 emerged as the worst day for daily outflows in the almost year-long history of these ETFs.
A total of $671.9 million was withdrawn from these investment vehicles, with Fidelity’s FBTC and Grayscale’s BTC leading the withdrawals, accounting for $208.5 million and $188.6 million, respectively.
Even BlackRock’s IBIT, which continues to set records, failed to draw any new investments and did not experience significant withdrawals, ultimately closing at $0.0.
Ethereum ETFs Facing Similar Challenges
Meanwhile, spot Ethereum ETFs, which had enjoyed a month-long run without a single net outflow since November 21, also faced a reversal, seeing $60.5 million pulled out.
Although this figure is more than ten times lower than the Bitcoin ETF withdrawals, the price of Ethereum has not remained unscathed, dropping over 9% in the past day and struggling around $3,350 after a recent rejection at the $4,000 mark.
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