Bitcoin ETFs suffered a sharp pullback this week after the US Federal Reserve reduced interest rates by 25 basis points. According to data from Farside Investors, spot Bitcoin ETFs listed in the US saw $470 million in outflows on Wednesday.
This marked their biggest single-day decline in two weeks.
Bitcoin ETFs Record Largest Withdrawals in Weeks
Fidelity’s FBTC led the outflows with $164 million, followed by ARK Invest’s ARKB at $143 million. BlackRock’s IBIT saw $88 million in redemptions while Grayscale’s GBTC recorded $65 million.
Bitwise’s BITB reported a smaller $6 million exit.
The ETF market bled on Wednesday | Source: Farside
The outflows erased much of the gains seen earlier in the week. Bitcoin ETFs had attracted $149 million in inflows on Monday and another $202 million on Tuesday before the sudden reversal.
Cumulative net inflows have now dropped to $61 billion according to SoSoValue, with total assets under management down to $149 billion.
That represents about 6.75% of Bitcoin’s total market cap.
Bitcoin Price Falls Despite Fed Rate Cut
Bitcoin traded between $108,201 and $113,567 over the past 24 hours according to CoinGecko. Many traders had expected the rate cut to lift crypto prices by improving liquidity. Instead, Bitcoin dropped immediately after the announcement.
Analysts say that the move was already priced in. Investors had anticipated the 25-basis-point cut, which left little room for surprise. Some also interpreted the Fed’s cautious tone as a sign that further cuts may not come soon.
Still, sentiment improved later in the day after Trump met Xi to discuss easing trade tensions. The news gave markets a brief boost and helped Bitcoin recover above $110,000.
ETFs Still Hold Over 1.5 Million Bitcoin
Despite the recent withdrawals, ETFs are one of the largest holders of Bitcoin. According to data from Bitbo, they collectively hold more than 1.5 million BTC worth about $169 billion. That equals 7.3% of the total Bitcoin supply.
BlackRock’s IBIT dominates with 805,239 BTC, followed by Fidelity’s FBTC at 206,258 BTC. Grayscale’s GBTC holds 172,122 BTC, which means that it is among the top three.
U.S. Bitcoin ETFs are still performing well | Source: Bitbo
The Federal Reserve’s 25-basis-point cut reduced the benchmark rate to a range of 3.75%–4.0%.
While the move was widely expected, Fed Chair Jerome Powell’s comments about “data dependence” left traders uncertain about future cuts.
US equity markets also turned volatile. The Nasdaq gained slightly while the dollar strengthened. Treasury yields rose as traders reassessed expectations for more easing.
Earlier Inflows Show Investor Interest Remains Strong
Despite Wednesday’s losses, Bitcoin ETFs have drawn consistent inflows through much of this year. Earlier this month, data from CoinShares showed $931 million in net inflows to Bitcoin investment products in a single week.
That came after lower inflation numbers raised hopes for more rate cuts.
Investor flows show that interest is still strong | Source: CoinShares
Since the Fed began easing policy this year, Bitcoin funds have attracted $9.4 billion in new investments. Year-to-date inflows stand at $30.2 billion, though still below last year’s $41.6 billion total.
US funds currently dominate the market and are bringing in $843 million of those weekly inflows. On the other hand, German funds added $502 million. Swiss-based products saw minor outflows due to provider transfers rather than true selling pressure.
This steady investor interest indicates that institutional adoption is solid, even as short-term traders react to market swings.
Source: https://coinpaper.com/12009/470-million-vanishes-from-bitcoin-et-fs-after-fed-rate-move-is-liquidity-drying-up
