Bitcoin News Today: U.S. Crypto ETFs Lose $1 Billion as Bitcoin Dips 8% to $112,000

Heavy redemptions from U.S. spot Bitcoin and Ethereum ETFs pushed out nearly $1 billion in a single day as Bitcoin fell to $112,000, marking one of the largest outflows this month. The selling pressure was particularly concentrated in Fidelity and Grayscale funds, with Fidelity’s FBTC shedding $246.9 million and Grayscale’s GBTC losing $115.5 million in net redemptions [1]. Ethereum ETFs also saw significant outflows, totaling $422.3 million, led by Fidelity’s FETH with $156.3 million in withdrawals [2]. These figures highlight growing caution among investors following weeks of sharp price swings.

The selloff came as Bitcoin declined nearly 8% from a record high of $124,000 set just days earlier. The broader crypto market dropped 1.5% in value to $3.9 trillion, with Ethereum falling to $4,162 and other major tokens also retreating [3]. The sell-off intensified as traders booked profits ahead of Federal Reserve Chair Jerome Powell’s speech at the Jackson Hole Symposium, where any hints about rate cuts could influence market sentiment.

ETF inflows, once a strong tailwind for Bitcoin, have recently reversed course. Just a week before the outflows, spot Bitcoin ETFs had posted $230.9 million in inflows—the strongest buying activity of the month. But within days, the trend reversed, with $121.8 million in outflows on August 18 and $141.4 million on August 15 [4]. Despite the recent redemptions, cumulative inflows into Bitcoin ETFs remain strong at $54.85 billion, with total assets under management at $150.9 billion. However, the figure has fallen nearly $5 billion from its peak earlier in the month [5].

Ethereum ETFs have followed a similar trajectory. After surging inflows in July and early August that pushed cumulative inflows from $7.2 billion to over $11 billion in two weeks, sentiment has cooled. Since mid-August, consecutive days of withdrawals have signaled a shift in market dynamics [6]. Yet, Ethereum ETFs still maintain a robust cumulative net inflow of $12 billion, and daily trading volumes around $2.7 billion indicate continued institutional engagement.

The volatility has also spilled over into the derivatives market, where over 128,000 traders were liquidated in the past 24 hours, with total losses reaching $450.7 million [7]. Long positions accounted for the majority of these losses, with Ethereum and Bitcoin leading the liquidations at $175 million and $101 million respectively [8]. The heavy liquidations underscore the risks of leveraged trading during periods of high volatility.

Analysts suggest the recent correction reflects both the intensity of profit-taking after Bitcoin’s rally and the natural cooling that often follows strong institutional inflows. The Market Value to Realized Value (MVRV) ratio climbed to 21% last week, indicating that most holders held significant unrealized gains, which created strong selling incentives [9]. BlackRock and Fidelity, which together control more than 75% of the Bitcoin ETF market, continue to accumulate large amounts of Bitcoin. As of August 17, the two firms held a combined 948,766 BTC, or nearly 75% of all ETF-held Bitcoin [10].

Despite the outflows, the long-term institutional demand for Bitcoin remains intact. BlackRock’s iShares Bitcoin Trust (IBIT) holds 748,968 BTC, or nearly 60% of all ETF-held Bitcoin, while Fidelity’s FBTC holds 199,798 BTC [11]. Grayscale’s GBTC, while still relevant, has been overtaken by these Wall Street giants. Ether ETFs have also gained momentum, with Bloomberg analyst Eric Balchunas noting that they turned Bitcoin into the “second best” crypto asset in July [12].

The market now awaits signals from Federal Reserve Chair Jerome Powell at the Jackson Hole Symposium. Investors are closely watching for any indication that the Fed may cut rates in September. With crypto sentiment shifting from “Greed” to “Fear” on the Crypto Fear & Greed Index, the outcome of Powell’s speech could play a crucial role in determining the next move for Bitcoin and the broader market.

Source:

[1] [2] [3] [4] [5] [6] [7] [8] [9] [10] [11] [12]

[1] https://cryptonews.com/news/crypto-etfs-bleed-nearly-1b-as-bitcoin-dips-to-112k-are-analysts-buying-the-dip/