Bitcoin Hits Two-Month Low as Billions Exit Spot ETFs
Bitcoin has dropped to new two-month lows in early Asia trade, reflecting a continued decline in sentiment surrounding the largest cryptocurrency, as investors withdraw funds from exchange-traded funds associated with the token. Bitcoin experienced a decline of up to 3.9 percent, dropping to $81,102 on Friday in Singapore. This marks its lowest point since November 21, continuing a downward trend that intensified overnight. The asset has now declined over 34 percent from its all-time high recorded on October 6. According to data, over $1.5 billion in bullish positions across all tokens have faced liquidation in the past 24 hours.
The 12 US-listed spot Bitcoin ETFs have experienced three straight months of net redemptions. If this trend continues through the end of January, it will signify the longest ongoing period of outflows since these investment vehicles were introduced in 2024. According to data, a staggering $4.8 billion has been drained from the products over that period. Bitcoin’s current struggles stand in stark contrast to the recent rally in gold and other precious metals. Investors, looking for safety amid geopolitical turmoil, are turning away from cryptocurrencies and opting for traditional safe-haven assets instead. That’s casting shadows on assertions that the token operates as a form of “digital gold.”
“Suddenly, cryptocurrencies no longer appear to be an alternative to fiat money and a hedge against the not-so-responsible financial policies of major countries,” stated Alex Kuptsikevich. Fund flows highlight the transition. BlackRock’s iShares Bitcoin Trust, recognized as the largest Bitcoin ETF and one of the most successful fund launches in history, has seen its total assets lag behind those of BlackRock’s Gold ETF. One method to evaluate if Bitcoin is realizing its potential as digital gold is to gauge its value against the precious metal itself. On that metric, it is underperforming, experiencing a decline of approximately 60 percent in gold terms since its peak in late 2024. Some traders are indicating that the recent downturn could signal further trouble for Bitcoin, with the possibility of a drop below $80,000 if negative sentiment continues through the weekend.
“I wouldn’t be shocked to see BTC trade in the $70,000 range soon,” stated Adam McCarthy. If it falls below $80,000 today, “it could continue to slide into the weekend and with lower liquidity on these days that could have an outsized impact,” he said. Tony Sycamore, market analyst, stated that the recent selloff aligns with his perspective that the rise from November’s low was a corrective or counter-trend rally. “Its decline overnight suggests the downtrend has now resumed,” he stated.
