Key facts
- Bitcoin ETFs experienced outflows totaling $484.9 million on Wednesday.
- This marks the largest single-day outflow for Bitcoin ETFs since June 25.
- BlackRock's IBIT saw outflows of $207.7 million, and Fidelity's FBTC saw $105.1 million.
- The outflows erased about 81% of the inflows from the prior nine sessions.
- The 30-year Treasury yield reached approximately 5.7%, its highest level since 2002.
- Brent crude oil settled near $100 a barrel.
Bitcoin ETFs saw their largest single-day outflow since June 25, with $484.9 million exiting the funds on Wednesday. BlackRock's iShares Bitcoin Trust (IBIT) accounted for $207.7 million of the outflows, followed by Fidelity's FBTC with $105.1 million. This significant outflow erased approximately 81% of the inflows accumulated over the previous nine sessions.
The decline in Bitcoin ETFs is largely attributed to broader macroeconomic factors rather than issues within the cryptocurrency market itself. The 30-year Treasury yield climbed to about 5.7% on Wednesday, its highest level since 2002, while Brent crude oil settled around $100 a barrel. These conditions, coupled with ongoing ship attacks around the Strait of Hormuz, contribute to higher oil prices and feed inflation.
Higher inflation typically leads to a hawkish stance from the Federal Reserve, which in turn keeps bond yields elevated. This macro environment presents a challenge for assets like Bitcoin, which do not pay interest, as investors may opt for higher-yielding Treasuries. The Federal Reserve raised rates in September, and minutes from their latest meeting indicate that most officials anticipate another hike before the end of the year, although market odds for an October hike are low.
In line with the ETF outflows, Bitcoin's price also slid, falling as low as $81,749.83 on Thursday, approximately 6% below its recent peak. This downturn led to significant liquidations in the derivatives market, with roughly $429 million in long positions being liquidated over a 24-hour period.