After the election of the 47th US President, Donald Trump, Bitcoin [BTC] underwent an extraordinary surge. The leading cryptocurrency crossed the significant $100,000 threshold, reaching an all-time high of $108,000.
This increase was accompanied by substantial investments in spot BTC exchange-traded funds (ETFs), indicating robust investor interest.
Bitcoin ETFs Witness Outflows
However, the momentum has shifted abruptly. Bitcoin ETFs have now seen four consecutive days of fund outflows, starting on December 19, with a substantial withdrawal of $671.9 million.
Latest figures from Farside investors show that on December 24, BTC ETFs experienced notable outflows amounting to $338.4 million, primarily from major market players.
The exodus was led by BlackRock’s IBIT with $188.7 million in outflows, followed by Fidelity’s FBTC at $83.2 million, and ARK 21Shares’ ARKB with $75 million.
Interestingly, while other ETFs showed no significant activity, Bitwise’s BITB stood out by recording inflows of $8.5 million amid the general trend of withdrawals.
The shift from inflows to outflows in Bitcoin ETFs coincided with a substantial price dip, with Bitcoin falling to as low as $94,000 on December 24, reflecting dwindling institutional interest.
Possible Reasons Behind the Trend
It’s essential to note that this decline comes amidst increasing speculation of a potential market slowdown.
Analysis of historical U.S. election year data suggests that the ongoing surge might lose steam post-Trump’s inauguration on January 20, 2025.
Historical trends observed by Bloomberg and Macrobond Financial hint at a common pattern in U.S. markets, where assets like stocks and cryptocurrencies, such as Bitcoin, often witness a rally following an election. However, this uptrend typically fades once the President-elect assumes office, raising concerns about Bitcoin’s performance post-inauguration.
Despite these apprehensions, Bitcoin’s recent price movements hint at a possible turnaround. Recent CoinMarketCap data shows BTC trading at $98,052.98, indicating a 4.18% surge in the last 24 hours.
This upward movement may suggest a reversal of fortunes for Bitcoin ETFs, which have faced challenges in recent days.
Ethereum Gains Attention
Meanwhile, the focus has shifted to Ethereum [ETH]. Spot Ethereum ETFs witnessed inflows of $53.6 million, highlighting a growing investor preference for Ethereum over Bitcoin in the present market conditions.
On the price front, Ethereum remains steady around $3,400, while Bitcoin approaches the critical $100,000 threshold, edging closer to its resistance level of $99,000.
Therefore, amidst market uncertainties, signs of recovery indicate a potentially strong end to the year.