Market Pullback: Bitcoin ETF Flows Reverse on Hawkish Fed Guidance

Bitcoin and Ethereum ETFs See Outflows as Fed Signals Caution

Spot Bitcoin (BTC) ETFs experienced their first outflows in over a week on Wednesday, shedding $51.28 million as investors responded to the Federal Reserve’s cautious guidance on monetary policy.

This ended a seven-day inflow streak that had brought nearly $3 billion into Bitcoin ETFs, though total assets under management remain above $150 billion, according to SoSoValue data. Investor sentiment shifted after Fed Chair Jerome Powell highlighted economic uncertainty and suggested fewer rate cuts than markets had anticipated.

The Fed delivered a 25-basis-point rate cut, lowering its benchmark to 4.00%-4.25%, marking its first cut of the year. However, updated projections indicated only two more cuts in 2025 and fewer in 2026, signaling a more cautious stance than traders had priced in. Powell also cited “elevated” inflation and increasing “downside risks” to employment, prompting mild pullbacks in risk assets.

Ethereum (ETH) ETFs also posted net outflows for a second consecutive day, totaling $1.89 million following $61.7 million in withdrawals the prior session.

Despite ETF redemptions, cryptocurrency prices moved modestly higher. Bitcoin rose roughly 0.3%, Ethereum gained 1.7%, and the broader CoinDesk 20 (CD20) index advanced 2%, reflecting selective buying amid market caution.