Bitcoin and Ethereum Outflows Surge, Inflation Data Sparks Market Concern

Cryptocurrency markets have been abuzz with speculation about a potential surge in Bitcoin (BTC) and Ethereum (ETH) outflows, which could significantly impact the broader financial landscape. Experts believe that a surge in outflows could break the bank, as seen in recent data from SoSoValue.

On February 12, a total of 12 spot coins with a cumulative value of $251.03 million were outflowed, marking a 342% increase from the previous day's $56.76 million. Fidelity's FBTC led the outflow rate with $101.97 million, followed by ARK and ARKB with a combined total of $87.03 million. Other notable outflows included Bitwise's BITB ($24.94 million), BlackRock's IBIT ($22.11 million), Invesco Galaxy's BTCO ($9.69 million), Grayscale's GBTC ($6.92 million), and Valkyrie's BRRR ($3.71 million). As a result, the total trading volume for BTC ETFs reached approximately $2.53 billion, with a cumulative net inflow of around $40.21 billion.

ETH ETFs also experienced outflows, with around $40.95 million in redemptions reversing the previous day's $12.58 million inflow. Fidelity's FETH and Grayscale's ETHE were the primary contributors to these losses, with a combined outflow of $40.95 million. The stark outflow rate of BTC and ETH coincided with stronger-than-expected US inflation data, which showed a year-over-year inflation rate of 3.3%, exceeding the 3.1% expectation.

Crypto Investment Specialist at 21Shares, David Hernandez, noted that any rate cut could unleash a flood of liquidity, propelling equities and crypto higher. He suggested that BTC could break through $110,000 and solidify its place in six-digit territory. While BTC may appear dicey, experts believe that the market could work out in favor of cryptocurrencies.