Bitcoin tumbles after record ETF outflows, 60% Fed-hike odds

Bitcoin declined after a record week of outflows from bitcoin exchange-traded funds and a jump in market-implied odds of a Federal Reserve rate increase. The twin developments increased selling pressure and pushed volatility higher in digital-asset markets.

Investors withdrew a record amount from bitcoin ETFs this week, forcing fund managers to sell underlying bitcoin to meet redemptions. Those sales accelerated trading volumes on spot markets. Market participants reported that liquidity was thinner than earlier in the rally, which amplified price moves when large blocks of bitcoin were sold.

Futures markets priced in roughly a 60% probability of a Fed rate hike at the next policy meeting. That shift in expectations pushed up yields on short-term Treasury securities and contributed to wider risk-off positioning in cross-asset trading.

Derivatives markets reflected the stress. Funding rates and implied volatility rose as traders adjusted hedges, and some leveraged positions were forced to unwind. Exchange order books showed wider bid-ask spreads during peak selling, indicating reduced depth when outflows intensified.

Market participants pointed out that ETF flows have become a dominant driver of price moves, often outweighing on-chain demand or miner behavior. Large holders have used ETFs as an on- and off-ramp, and rapid reversals in flows can lead funds to transact through spot sales to meet redemptions.

Trading desks and fund managers are monitoring forthcoming ETF flow reports and Fed communications for signs of stabilization or further redemptions. They will track order book depth and funding rates to assess whether markets can absorb additional outflows without larger price declines.