Bitcoin and Ethereum ETFs face their second-largest selloff since launch as macroeconomic uncertainties and inflation fears weigh heavily on the crypto market.

 A Wave of Panic Grips Crypto ETFs

Bitcoin and Ethereum exchange-traded funds (ETFs) faced significant investor withdrawals on Wednesday, marking their second-largest selloff since their introduction a year ago. With mounting macroeconomic uncertainties and fears of rising inflation, the crypto market is feeling the weight of pessimism.

This massive outflow highlights the volatility of high-risk assets as market participants closely monitor key economic indicators.

Record Outflows for Bitcoin and Ethereum ETFs

A staggering $582 million was pulled from 11 Bitcoin ETFs collectively, underscoring the turbulence in the crypto investment landscape. This selloff stands as the second-largest on record for these financial instruments, following December 19’s record-breaking outflows.

Fidelity’s Bitcoin ETF led the exodus, recording $159.3 million in sales—the highest since July 26. This sharp withdrawal trend signals a growing sense of caution among investors navigating an uncertain economic environment.

Inflation Fears and Bond Market Pressure

The substantial outflows coincide with mounting concerns over rising inflation in the United States, which has sparked a bond market selloff. These developments have put additional pressure on high-risk assets, including cryptocurrencies.

Bitcoin’s price has also mirrored this sentiment, dropping by 8.5% over the past three days in a failed attempt to breach the $100,000 threshold. Despite this setback, analysts remain optimistic about a potential recovery as market conditions evolve.

Anticipation Builds for US Jobs Report

Investors are now turning their attention to Friday’s U.S. jobs report, a critical economic indicator that could offer insights into the health of the U.S. economy. The report is expected to shape market sentiment and potentially influence the trajectory of cryptoassets like Bitcoin and Ethereum.

While the crypto market’s resilience is being tested, some analysts believe the current downturn is temporary, with opportunities for a rebound in the near future.

A Turning Point for Crypto ETFs?

The second-largest selloff of Bitcoin and Ethereum ETFs reflects the delicate balance between macroeconomic pressures and investor sentiment. As inflation fears and market uncertainties continue to weigh on the crypto market, all eyes are on upcoming economic data that could chart the course for a recovery.

Whether this marks a temporary hiccup or a deeper correction, the coming days will be crucial in determining the future of crypto ETFs amid an ever-evolving financial landscape.