Ethereum ETFs See Major Outflows as Crypto Market Faces Turbulence

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As a seasoned researcher with years of immersion in the ever-evolving world of cryptocurrencies, I’ve seen more market fluctuations than I can count. December 19th marked another day of intrigue in this dynamic landscape, with Ethereum spot ETFs witnessing a significant outflow of funds totaling $60.47 million.

19th December was a dismal day for U.S. Ethereum ETFs, with a total withdrawal of about $60.47 million. This ended a 18-day run where there had been continuous inflow of funds.

In recent times, the Grayscale Ethereum Trust (ETHE) has been leading a downward trend, with an outflow of approximately $58.13 million. Notably, other significant players such as Bitwise Ethereum ETF (ETHW), Invesco, and Grayscale’s mini ETFs have also seen smaller but substantial outflows amounting to around $12.28 million collectively.

Conversely, BlackRock’s ETHA, boasting a net worth of $3.45 billion, didn’t see any investments during the day. Likewise, Franklin’s EZET and 21Shares’ CETH stayed unchanged. However, Fidelity’s FETH and VanEck’s ETHV were the exceptions, accumulating a combined $10 million in new investments.

Regardless of initial challenges, Ethereum ETFs have garnered a total of $2.4 billion in net inflows since their July debut. This growth can be attributed to a series of events such as the rise in Ethereum prices, Trump’s pro-crypto stance in the US elections, and recent market volatility. In just the last 18 days, these funds have seen an influx of $1.27 billion, with Ether rising from $3,500 to surpass the significant resistance at $4,000. It’s worth noting that during this local peak, the Ethereum Foundation decided to sell 100 ETH.

Ethereum (ETH) Price Drop

On Thursdays, a simultaneous decrease in cryptocurrency holdings occurred alongside a general decline in the crypto market. The Federal Reserve’s third annual reduction of interest rates in 2024 sparked renewed concerns about inflation. In addition, Fed Chairman Jerome Powell announced intentions for additional rate cuts in 2025 to strengthen the dollar. These events triggered a wave of selling in risky assets, causing the global cryptocurrency market value to plummet significantly, from $3.7 trillion down to $3.36 trillion.

ETH experienced a significant drop, falling approximately 9% in the last 24 hours to reach $3,371. This decline also affected its market capitalization, which dropped by around 8.89%, leaving it at roughly $404 billion. The Relative Strength Index (RSI) for ETH indicates a bearish trend for the cryptocurrency, with a reading of 40 suggesting strong downward price pressure.

In contrast to the market’s dip, information from IntoTheBlock shows that about 81% of Ethereum holders are currently enjoying profits from their investments due to the current price levels. Conversely, approximately 16% have experienced losses, while a small fraction of around 3% are neither in profit nor loss.

As a dedicated crypto investor, I find myself observing that the Crypto Fear & Greed Index remains steady at 74, indicating a strong sense of greed in the market. This suggests to me that many investors view the recent downturn not as a cause for alarm, but rather as an enticing opportunity to buy, fueling optimism for a potential rebound as the holiday season draws near.

On December 19th, US Bitcoin ETFs experienced their largest single-day outflows to date, with approximately $680 million being withdrawn. This marked an end to a 15-day streak where these investment products had seen continuous inflows of funds. As I write this, Bitcoin is trading around $96,600 and has dropped by 5% over the past day.

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2024-12-20 12:57