Recent Influx of Funds into Bitcoin and Ether ETFs as Powell Hints at Rate Cuts
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Recent Influx of Funds into Bitcoin and Ether ETFs as Powell Hints at Rate Cuts

After a significant market downturn, US Bitcoin and Ether ETFs are seeing a resurgence in investments, backed by Federal Reserve Chair Jerome Powell's indications of potential rate cuts.

US Bitcoin and Ether exchange-traded funds (ETFs) experienced a notable turnaround with fresh investments on Tuesday after hints of potential rate cuts from Federal Reserve Chair Jerome Powell. Following a previous day of significant outflows, Bitcoin ETFs attracted $102.58 million in net inflows, reversing the prior day’s outflow of $326 million. Fidelity’s Wise Origin Bitcoin Fund (FBTC) recorded the highest inflow of $132.67 million, while BlackRock’s iShares Bitcoin Trust (IBIT) faced a smaller outflow of $30.79 million.

Cumulatively, total net assets in all spot Bitcoin ETFs now reach $153.55 billion, comprising 6.82% of Bitcoin’s market cap, with total inflows amounting to $62.55 billion.

Ether ETFs also mirrored this rebound, receiving $236.22 million in net inflows after significant outflows of $428 million the previous day. Fidelity’s Ethereum Fund (FETH) led this industry with $154.62 million in inflows, with Grayscale’s Ethereum Fund (ETH) and Bitwise’s Ethereum ETF (ETHW) following with $34.78 million and $13.27 million, respectively.

Spot Bitcoin ETFs turn positive. Source: Farside

Powell hints at more rate cuts

During his address at the National Association for Business Economics conference, Jerome Powell signaled that the Fed might conclude its balance sheet reduction efforts and prepare for potential rate cuts as the labor market shows signs of weakness.

Powell stated, “The Fed may soon stop its quantitative tightening process, noting that reserves are somewhat above the level consistent with ample liquidity.”

Vincent Liu from Kronos Research commented, “An October rate cut will have markets taking flight, prompting liquidity flows into crypto and ETFs, leading to more pronounced movements. Expect digital assets to rise as capital seeks efficiency in a softer rate environment.”

Crypto products stay resilient amidst recent volatility

Despite recent market setbacks, crypto investment products have maintained strong performance. As reported, these products secured $3.17 billion in inflows last week, even amidst significant market turbulence triggered by renewed US-China tariff tensions, which resulted in only $159 million in outflows. This resilience has set total inflows for 2025 at $48.7 billion, exceeding last year’s total.

Liu emphasized that easing tensions between the US and China, along with demand for digital assets, is being driven by economic factors echoed in gold’s strength.

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