Bitcoin ETFs Face Major Outflows Amidst Fed Decisions

In a turbulent week for the crypto market, Bitcoin ETFs experienced significant outflows totaling $621 million, marking the second-largest outflow ever recorded for these funds. Crypto investment firm CoinShares attributed the mass exodus to the Federal Reserve’s decision to maintain interest rates between 5.25% and 5.50%. This move echoes a similar market reaction in August 2022 when Fed Chair Jerome Powell’s rate hike warnings caused investors to sell off risk assets. Quinn Thompson, founder of Lekker Capital, predicts that the full impact will become more evident in the coming weeks.
The outflows from Bitcoin ETFs contributed to a 6% decline in total crypto assets under management in ETFs, dropping from $100 billion to $94 billion. However, Ethereum investment products saw a contrasting trend with $13 million in inflows, and Lido and Ripple collectively gained $3 million. The broader financial market was also affected, with US equity funds seeing almost $22 billion in outflows, the largest since December 2022.
In terms of market performance, Bitcoin fell by 1% over the past 24 hours, trading at $65,480, while Ethereum dipped by 0.3% to $3,430. The crypto market remains under pressure, with analysts and investors closely watching the Fed’s next moves.