tl;dr
Following the U.S. Federal Reserve's 25-basis-point rate cut, Bitcoin ETFs experienced a $470 million outflow on Wednesday, their largest single-day decline in two weeks. Despite the rate cut, Bitcoin prices fell initially, though they later recovered slightly. Major ETFs like Fidelity's FBTC and AR...
Bitcoin ETFs Suffer Sharp Pullback After Fed Rate Cut, Record $470M Outflows
The Bitcoin exchange-traded funds (ETFs) market faced a significant downturn this week following the U.S. Federal Reserve’s decision to cut interest rates by 25 basis points. According to data from Farside Investors, spot Bitcoin ETFs listed in the U.S. experienced $470 million in outflows on Wednesday, marking their largest single-day decline in two weeks. This reversal erased much of the gains seen earlier in the week, highlighting the volatility of the ETF sector amid shifting macroeconomic conditions.
**Top ETFs Suffer Major Outflows**
Fidelity’s Fidelity Bitcoin Fund (FBTC) led the outflows with $164 million, followed by ARK Invest’s ARKB at $143 million. BlackRock’s iShares Bitcoin Trust (IBIT) saw $88 million in redemptions, while Grayscale’s Bitcoin Trust (GBTC) recorded $65 million in withdrawals. Bitwise’s BITB reported a smaller outflow of $6 million. These withdrawals contrasted sharply with the $149 million in inflows on Monday and $202 million on Tuesday, underscoring the abrupt shift in investor sentiment.
**Bitcoin Price Drops Despite Rate Cut**
Despite expectations that the Fed’s rate cut would boost crypto prices by improving liquidity, Bitcoin fell immediately after the announcement, trading between $108,201 and $113,567 over the past 24 hours. Analysts noted that the 25-basis-point reduction was already anticipated by markets, leaving little room for a positive reaction. Additionally, the Fed’s cautious tone—emphasizing “data dependence” and signaling uncertainty about future cuts—fueled investor caution. However, Bitcoin recovered slightly above $110,000 after a brief boost from news of a meeting between U.S. President Donald Trump and Chinese President Xi Jinping, which eased trade tension concerns.
**ETFs Hold Over 1.5 Million Bitcoin**
Despite the recent withdrawals, Bitcoin ETFs remain major holders of the asset. According to data from Bitbo, they collectively hold more than 1.5 million BTC, valued at approximately $169 billion, or 7.3% of the total Bitcoin supply. BlackRock’s IBIT leads with 805,239 BTC, followed by Fidelity’s FBTC (206,258 BTC) and Grayscale’s GBTC (172,122 BTC). These figures highlight the growing institutional presence in the Bitcoin market.
**Market Context and Outlook**
The Fed’s rate cut, which lowered the benchmark interest rate to a range of 3.75%–4.0%, was widely expected. However, the central bank’s emphasis on waiting for more data to guide future decisions left traders uncertain about further easing. Meanwhile, U.S. equity markets turned volatile, with the Nasdaq gaining slightly and the dollar strengthening. Treasury yields rose as investors reassessed expectations for additional rate cuts.
**Cumulative Inflows Decline**
As of the latest data from SoSoValue, cumulative net inflows into Bitcoin ETFs have dropped to $61 billion, with total assets under management falling to $149 billion. This represents roughly 6.75% of Bitcoin’s total market cap, underscoring the ETFs’ significant role in the broader crypto ecosystem.
The recent pullback in Bitcoin ETFs reflects the interplay between macroeconomic policy, market expectations, and investor behavior. While the sector remains a key driver of Bitcoin’s institutional adoption, the volatility highlights the challenges of navigating a market shaped by both regulatory developments and global economic shifts.