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Bitcoin and Ether ETFs Lose $111 Million After Rate Cut Disappointment

U.S. spot Bitcoin and Ether ETFs saw a combined $111 million in outflows after the Fed took a tougher stance. Investors are now waiting for fresh signals on rates and risk appetite.

By Mike Hesp
• 2 min read
Bitcoin and Ether ETFs Lose $111 Million After Rate Cut Disappointment

Key Takeaways

  • U.S. spot Bitcoin and Ether ETFs posted a combined $111 million in outflows after the Federal Reserve's rate decision.
  • Bitcoin funds lost $82 million and Ether funds lost $29 million, with BlackRock's IBIT and ARKB among the biggest decliners.
  • The Fed kept rates at 3.50% to 3.75% and dialed back expectations for rate cuts, which put pressure on the crypto market.

The recent recovery rally in the crypto market looks like it is losing steam as U.S. spot Bitcoin and Ether ETFs recorded a combined $111 million (€95.8 million) in outflows. This move follows the Federal Reserve's rate decision, which cooled hopes for rate cuts.

How the Rate Decision Hit ETF Flows

On Wednesday, Bitcoin funds lost $82 million (€70.7 million), while Ether funds saw $29 million (€25 million) leave, according to SoSoValue data. The outflows in Bitcoin were broad-based, with BlackRock's IBIT seeing $31 million (€26.7 million) leave and ARKB down $44 million (€38 million). All Ether funds also ended in the red. The Federal Reserve kept rates, as expected, at 3.50% to 3.75%, but the outlook got a lot tighter. The median forecast now calls for a policy rate of 3.8% by the end of 2026, up from 3.4% in March, and nine of the 18 policymakers even see a rate hike this year. That fits the broader picture of tighter Fed policy, where higher rates put pressure on demand for risk assets.

Changing Macro Conditions

The crypto market reacted right away to the shift in monetary policy. Where rate cuts were once expected to support crypto prices, the outlook now points to possible hikes. That has led to a stall in total market value, which has been hovering around $2.26 trillion (€1.9 trillion) since Tuesday. Bitcoin is currently trading around $63,800 (€55,000), right in the middle of its recent range. The shift in sentiment also comes from the fact that higher interest rates make non-yielding assets like Bitcoin and Ether less attractive. Investors may be more likely to move into yield-bearing investments, like government bonds.

Why This Matters for European Crypto Investors

Developments in the U.S. can also matter for European investors, since global rate policy and institutional interest in ETFs affect the worldwide crypto market. Lower demand for spot ETFs and the changed rate backdrop can also shape sentiment and liquidity in Europe, especially for investors looking for exposure through regulated funds. It remains to be seen whether ETF demand comes back in the coming months, depending in part on future rate decisions and macroeconomic signals.

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