Bitcoin ETFs bled $484.9 million in a single session on Wednesday, the worst day for the funds since June 25. One trading day erased roughly 81% of everything that had flowed in over the previous nine. Two weeks of patient buying, gone by the close.
BlackRock and Fidelity took the biggest hits
BlackRock’s IBIT led the outflows at $207.7 million. Fidelity’s FBTC followed at $105.1 million.
Context matters, though. The funds still sit on $57.8 billion in cumulative net inflows, so Wednesday reads as a bad day rather than a bank run.
Blame the macro picture, not crypto
The damage had little to do with crypto itself. The 30-year Treasury yield climbed to about 5.7% on Wednesday, its highest since 2002. Brent crude settled around $100 a barrel, and stocks slid from record highs.
Ship attacks around the Strait of Hormuz keep piling up, at least one a day since Oct. 2. Each one is a reason for oil to stay expensive.
The math gets awkward from there. Expensive oil feeds inflation, inflation keeps the Federal Reserve hawkish, and a hawkish Fed keeps bond yields high. That’s a rough setup for an asset that pays no interest, especially when a 10-year Treasury yields more than 5% and doesn’t lose 6% in a few days. Institutions run that calculation regularly, and their math moves the market.
The Fed isn’t done, but traders doubt it
The Fed raised rates in September for the first time since 2023. Minutes from the most recent meeting, released Wednesday, show most officials expect another hike before year end.
Traders aren’t buying it. CME currently prices the odds of an October hike at 19.4%, while prediction market Myriad gives it a 17% chance.
Longs paid the price
Bitcoin slid as low as $81,749.83 on Thursday, about 6% below the $86,978 peak it hit earlier this week. Derivatives traders took the brunt of it. Roughly $429 million in positions were liquidated over 24 hours, and 87.5% of them were long bets.
Uptober isn’t working this year
Bitcoin had risen in October six years running until last year, when it fell 3.69%. This year’s funds opened the month with $321.6 million of inflows over four sessions. They’re now $163.3 million in the red, with Halloween still 23 days away and plenty of time for things to get spookier.
The Fed meets next on Oct. 27-28 and again on Dec. 8-9. The September minutes set no date for the next increase.
