Bitcoin ETFs suffered their largest daily outflow in months on Wednesday, with funds losing $484.9 million according to data tracked by Decrypt. The withdrawal marked the worst single day since June 25, with BlackRock's IBIT fund accounting for $207.7 million of the outflow and Fidelity's FBTC contributing $105.1 million.
The one-day loss erased approximately 81% of inflows from the previous nine trading days. Despite the sharp pullback, Bitcoin ETF funds maintain $57.8 billion in cumulative net inflows since their inception, indicating the outflow remains contained relative to the broader position.
Macro Factors Drive Market Shift
Analysts attribute the selloff primarily to macroeconomic rather than crypto-specific factors. The 30-year Treasury yield climbed to approximately 5.7% on Wednesday, reaching its highest level since 2002. Brent crude oil settled near $100 per barrel amid ongoing ship attacks in the Strait of Hormuz, while equities declined from recent record highs.
The combination of higher bond yields and geopolitical tensions creates a challenging environment for assets like Bitcoin that generate no yield. With 10-year Treasury rates exceeding 5%, institutional investors face a straightforward calculation: traditional bonds offer attractive returns without the volatility Bitcoin experienced during the week.
Fed Policy Signals Uncertainty
The Federal Reserve raised rates in September for the first time since 2023. Minutes from the most recent policy meeting, released Wednesday, indicate that most Fed officials expect another rate increase before year end. However, market participants remain skeptical, with CME FedWatch data pricing a October rate hike at 19.4% probability and prediction markets assigning it a 17% chance.
The Fed will hold meetings on October 27-28 and December 8-9, though the September minutes did not establish a timeline for the next increase.
Bitcoin Price Action and Derivatives Pressure
Bitcoin declined to $81,749.83 on Thursday, roughly 6% below the $86,978 peak reached earlier in the week. Liquidations in the derivatives market totaled approximately $429 million over 24 hours, with 87.5% consisting of long positions.
October marked the end of a six-year winning streak for Bitcoin. Last year, the month posted a 3.69% loss. Year-to-date, Bitcoin ETF funds opened October with $321.6 million in inflows across four sessions but have since reversed to show $163.3 million in outflows through October 7.
