Following the historic victory of Donald Trump as the 47th President of the United States, the cryptocurrency market witnessed a significant surge in Bitcoin (BTC) prices. The leading digital asset crossed the monumental $100,000 mark for the first time, reaching an all-time high of $108,000. This remarkable milestone was accompanied by a surge in inflows into spot BTC exchange-traded funds (ETFs), indicating a high level of investor confidence and enthusiasm in the market.
However, the momentum in Bitcoin ETFs took a sudden turn as they experienced four consecutive days of outflows starting from December 19th, totaling a massive $671.9 million in withdrawals. The latest data from Farside investors on December 24th revealed substantial outflows of $338.4 million from BTC ETFs, with major players such as BlackRock’s IBIT leading the exodus with outflows of $188.7 million. Other significant outflows were seen from Fidelity’s FBTC at $83.2 million and ARK 21Shares’ ARKB with $75 million.
Interestingly, amidst the trend of withdrawals, Bitwise’s BITB emerged as an exception by recording inflows worth $8.5 million. The shift from inflows to outflows in Bitcoin ETFs coincided with a notable price drop, with Bitcoin plummeting to as low as $94,000 on December 24th, reflecting a decrease in institutional interest.
The potential reason behind this decline could be attributed to growing speculations of a market slowdown following Trump’s inauguration on January 20, 2025. Historical data from U.S. election year trends suggests that the current rally might lose momentum once the President-elect assumes office. This pattern has raised concerns about the sustainability of Bitcoin’s upward trajectory post-inauguration.
Despite these concerns, Bitcoin’s recent price movements indicate a potential turnaround, with the digital asset trading at $98,052.98, reflecting a 4.18% surge in the past 24 hours. This upward trend could signal a reversal of fortunes for Bitcoin ETFs, which have faced challenges in recent days.
Meanwhile, Ethereum (ETH) has garnered investor traction with spot Ethereum ETFs receiving inflows of $53.6 million. This highlights a growing preference for Ethereum over Bitcoin in the current market environment. Ethereum’s price stability around $3,400, coupled with Bitcoin’s approach towards the critical $100,000 threshold, indicates a positive sentiment in the market.
As the market remains uncertain, signs of recovery suggest a strong finish to the year. The evolving dynamics in the cryptocurrency space underscore the need for investors to stay informed and adapt to changing market conditions for optimal decision-making.