U.S. spot Bitcoin exchange-traded funds (ETFs) experienced $52.83 million in net outflows on Wednesday, breaking a four-day streak of net inflows that had attracted over $500 million.
The reversal in trend comes amid the market’s reaction to the Federal Reserve’s recent decision to cut interest rates by 50 basis points.
The outflows were primarily driven by Ark Invest and 21Shares’ ARKB fund, which saw a significant withdrawal of $43.41 million, according to data from SoSoValue.
GBTC and BITB Report Net Outflows
Grayscale’s Bitcoin Trust (GBTC) also reported a net outflow of $8.13 million, while Bitwise’s BITB registered a smaller outflow of $3.95 million.
The only spot Bitcoin fund to record net inflows was Grayscale’s Bitcoin Mini Trust, which gained $2.66 million.
Meanwhile, eight other funds, including BlackRock’s IBIT, reported no daily movements.
Despite the outflows, the 12 Bitcoin ETFs collectively reported a daily trade volume of $1.63 billion and an accumulated total net inflow of $17.44 billion.
In the Ether market, spot ETFs also saw outflows, with $9.74 million withdrawn as only two of nine funds had any net movements.
Both $BTC and $ETH spot ETF inflow negative but yet $BTC pumps to $62k
Where we head to from here?? I don’t know but trust me I’ve never been more bullish and patient at the same timepic.twitter.com/YBFTaANz3p
— 𝕯𝖊𝖆𝖉𝖑𝖎𝖓𝖊
(@cryptodeadline) September 19, 2024
Grayscale’s ETHE fund led the outflows with $14.66 million, while BlackRock’s ETHA fund reported a modest inflow of $4.92 million.
The Ether funds’ total daily trade volume reached $221.88 million, up from $176.26 million on Tuesday.
Since their introduction in July, Ether ETFs have accumulated a total net outflow of $615.58 million, highlighting the challenges faced in maintaining investor confidence in this volatile market.
As reported, digital asset investment products saw a turnaround last week, with inflows reaching $436 million following a prolonged period of outflows totaling $1.2 billion.
The reversal was influenced by shifting market expectations, particularly the potential for a 50-basis-point interest rate cut.
Bitcoin Surges After Fed Rate Cut Decision
Meanwhile, Bitcoin’s price surged 3.03% over the past 24 hours, reaching $62,138, as investors reacted to the Federal Reserve’s rate cut announcement.
The Federal Open Market Committee’s decision to reduce rates by 50 basis points is seen as a move to stimulate economic growth amid ongoing concerns.
“In the short term, a 50 bps rate cut could signal to the market that the economy is slowing, hinting at underlying issues that may not yet be apparent,” Matt Mena, Crypto Research Strategist at 21Shares, said in a comment.
“This could unsettle both traditional and digital investors, potentially triggering initial volatility. However, over the long term, Bitcoin and other digital assets have historically thrived in low-interest-rate environments.”
Mena added that this move could signal a return of liquidity, sparking a risk-on sentiment and fueling a sharp Bitcoin rally as investors chase higher yields.
Aside from Bitcoin, other cryptocurrencies also performed well.
Ether gained 4.14% to reach $2,414.60, while Solana jumped 6.21%, trading at $138.96, reflecting a broader recovery in risk assets driven by renewed market optimism.
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