Bitcoin and Ethereum face a fourth quarter shaped by Federal Reserve cuts and ETF demand. Markets are leaning toward a September policy move after the weakest monthly jobs gain since 2020, and crypto’s near-term path hinges on how rate expectations translate into spot ETF flows, funding costs, and options hedging.
According to the Bureau of Labor Statistics, August nonfarm payrolls rose by just 22,000, and the unemployment rate reached 4.3 percent.
Futures markets put a September cut at high odds. CME’s FedWatch tool shows rate probabilities embedded in fed funds futures, and broader markets are aligning with that setup as the dollar trades near recent lows and gold pushes new highs.
Per Reuters, the dollar index fell to a seven-week low and spot gold set a record this week, while traders priced a near-certain September reduction with a small tail for a larger move.
The next policy dates are fixed on the Federal Reserve’s calendar, with a two-day meeting on Sept. 16–17, then October and December sessions that will close the year. Some banks now map two quarter-point cuts in 2025, September and December, a shift that followed the August labor report.
What does history tell us?
ETF flows around prior easing windows provide a baseline for what new cuts could mean. In the week of the September 2024 cut, U.S. spot Bitcoin ETFs collectively took in roughly $2.4 billion, and Ethereum ETFs added about $600 million across the Monday to Friday prints.
During the December 2024 cut week, Bitcoin ETFs added about $1.6 billion while Ethereum funds were near flat. According to Farside Investors’ Bitcoin and Ethereum ETF tables, those episodes share a pattern, net-positive flows clustering around the decision with softer days on either side.
The last 60 days show how sensitive those tapes remain to macro. For Bitcoin ETFs, three daily prints above $800 million occurred in mid to late August, even with outflows on adjacent days, lifting the cumulative U.S. spot ETF net intake to about the mid-50 billions.
For Ethereum, a late-summer burst delivered the largest single day since inception, roughly $1.02 billion on Aug. 11, and cumulative net flows now stand in the low double-digit billions.
These tapes capture two points, flow momentum can flip quickly on macro headlines, and when inflows bunch, price tends to chase, with a practical, flows-first conversion for Bitcoin in 2024–2025 episodes falling near 2–3 percent per $1 billion of net buys during impulse weeks, a rough guide rather than a rule.
What do Q4 rate cuts mean for Bitcoin?
With that history in hand, three policy paths frame Q4. In a 75 bps total easing path into December, for example, a 25 bps cut at each meeting, baseline weekly Bitcoin ETF net flows in decision weeks could run $1.2-$2.0 billion and Ethereum $300-$700 million, assuming the summer relationship between cut odds and allocations persists.
Using a simple elasticity, every additional $1 billion of net Bitcoin ETF demand concentrated over five trading days could add 2–3 percent to spot returns that week, front-loaded into the post-decision sessions if guidance nods to follow-on cuts.
A 100 bps path, for example, 50 bps in September, followed by two more 25 bps cuts, or 25 bps in September with a faster follow-up, historically compresses real yields faster and has produced sharper risk-on impulses across gold and duration; if that repeats, the upper bound of the flow bands becomes more relevant, and BTC could see multi-day $700-$1,000 million runs rather than isolated spikes.
A 125 bps path, rare but feasible if labor data deteriorates and revisions are heavy, would likely coincide with a meaningfully weaker dollar and easier financial conditions, in which case model sensitivities should allow for sustained multi-week inflow regimes rather than single-week surges.
In that high-easing case, modeled ETF demand scales to the upper band, or about $1.5-6.0 billion of additional Bitcoin ETF inflows through Q4, a range that translates to roughly 3-18 percent in flow-linked price impulse depending on how tightly demand clusters around decision weeks.
Ethereum vs Fed rates
Options matter for Ethereum because listed options on spot Ethereum ETFs enable dealers to hedge systematically. The SEC’s April 9 approval order for NYSE American permitted options on the Bitwise Ethereum ETF, the Grayscale Ethereum Trust, and the Grayscale Ethereum Mini Trust, and similar filings at Cboe followed in April.
Where options volumes are robust, dealer gamma can dampen intraday ranges near large strikes into expiry weeks yet amplify directional moves when positioning is offside, so the ETH scenarios above should be paired with an options-adjusted elasticity.
A practical pair of sensitivities is plus or minus 1-2 percentage points around the base elasticity during heavy options weeks and a reduced impact during low-volume periods.
Macro cross-currents could stretch or compress these ranges. A record $100 billion weekly four-week bill sale highlights a shift toward very short-dated Treasury financing, which lowers the front end of the curve when cuts arrive, which is supportive for risk premia, though rollover risk rises if funding conditions tighten.
The calendar cadence also matters, with the September meeting setting forward guidance that shapes the end of the year. Market-implied paths for year-end policy, via the Atlanta Fed’s Market Probability Tracker, still distribute meaningful weight to multiple 2025-2026 cuts, which, if realized, sustain a lower-volatility backdrop for systematic inflows.
Conversely, if inflation data re-accelerates or if revisions reduce labor slack, the flow bands compress toward the lower edge, and elasticity tilts down as duration and the dollar stabilize.
Bitcoin and Ethereum reactions to rate cuts by the numbers
Putting numbers on price targets requires converting flow bands and rate paths into return ranges.
For Bitcoin, if September and December decision weeks each deliver $1.5-$2.5 billion of net ETF buys under a 75-100 bps total easing path, a 4-7 percent cumulative impulse from flows alone is plausible across those weeks, with spot outcomes widened by funding, basis, and the dollar path.
In a 100–125 bps path with heavier weeks, for example $2.5-$4.0 billion concentrated, the flow-linked contribution moves into the high single-digits. For Ethereum, the same logic applies at smaller dollar scales, but options hedging can either smooth or accentuate those moves near expiries.
| Path (total bps by Dec) | Decision weeks modeled | BTC ETF net flows (Q4, $B) | ETH ETF net flows (Q4, $B) | BTC flow-to-return effect (%) | ETH flow-to-return effect (%) |
|---|---|---|---|---|---|
| 75 | 2 | 0.8 to 3.2 | 0.2 to 0.8 | 1.6 to 9.6 | 0.6 to 4.0 |
| 100 | 3 | 1.2 to 4.8 | 0.3 to 1.2 | 2.4 to 14.4 | 0.9 to 6.0 |
| 125 | 3 (upper bands) | 1.5 to 6.0 | 0.4 to 1.6 | 3.0 to 18.0 | 1.2 to 8.0 |
The setup is data-dependent and should be updated in real time, but the scaffolding is stable, pair the FedWatch probabilities with Bitcoin and Ethereum ETF flows, and use the FOMC calendar to map decision weeks.
For macro context on risk appetite, track the dollar and gold trend and use the Market Probability Tracker to cross-check the implied path of policy.
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