US Bitcoin and Ether ETFs Rebound as Powell Signals Potential Rate Cuts
US spot Bitcoin and Ether ETFs have shown a notable recovery, reversing recent outflows after Federal Reserve Chair Jerome Powell hinted at potential interest rate cuts later this year. The sudden shift in market sentiment highlights growing investor optimism amid a period of volatility and macroeconomic uncertainty.
According to data from SoSoValue, spot Bitcoin ETFs recorded net inflows of $102.58 million on Tuesday, bouncing back from a $326 million outflow recorded just a day prior. Fidelity’s Wise Origin Bitcoin Fund (FBTC) led the inflows with $132.67 million, while BlackRock’s iShares Bitcoin Trust (IBIT) experienced a small outflow of $30.79 million. In total, net assets across all spot Bitcoin ETFs now stand at $153.55 billion, representing roughly 6.82% of Bitcoin’s market capitalization. Cumulative inflows into Bitcoin ETFs have reached $62.55 billion, reflecting continued investor interest in regulated crypto products.
Ethereum-based ETFs mirrored this positive trend, with net inflows of $236.22 million reported for Tuesday. Fidelity’s Ethereum Fund (FETH) led the way with $154.62 million, followed by Grayscale’s Ethereum Fund and Bitwise’s Ethereum ETF, recording inflows of $34.78 million and $13.27 million, respectively. These developments underscore a strong rebound in digital asset ETFs after the market endured steep losses in recent days.
Powell’s Rate Hints Fuel ETF Inflows
Market observers believe the recovery in US Bitcoin and Ether ETFs is closely linked to Jerome Powell’s remarks at the National Association for Business Economics conference. The Fed Chair signaled that the central bank is nearing the end of its balance sheet reduction program and could introduce rate cuts if the labor market shows signs of weakness.
Powell mentioned that the US banking system has “somewhat above the level” of reserves required for ample liquidity, suggesting room for further monetary easing. Analysts argue that even the expectation of lower interest rates can significantly affect risk assets, including cryptocurrency and ETFs.
Vincent Liu, chief investment officer at Taiwan-based Kronos Research, noted that “an October rate cut could drive markets higher, with crypto and ETFs benefiting from renewed liquidity and sharper moves. Digital assets are likely to feel the lift as capital seeks efficiency in a softer rate environment.”
The correlation between central bank signals and cryptocurrency flows has grown increasingly apparent, especially in regulated ETF products, which offer institutional investors a convenient way to gain exposure to Bitcoin and Ether without direct trading on exchanges.
Crypto ETFs Show Resilience Amid Market Turbulence
US Bitcoin and Ether ETFs have demonstrated remarkable resilience despite the recent market downturn. Last week, even as $20 billion in positions were liquidated across exchanges due to renewed US-China trade tensions, crypto investment products still saw $3.17 billion in inflows.
CoinShares highlighted that Friday’s panic led to only $159 million in outflows from digital asset funds, underscoring the robustness of investor demand for regulated crypto exposure. So far in 2025, total inflows into crypto investment products have reached $48.7 billion, surpassing the total for all of 2024.
Market analysts attribute this trend to several factors, including easing US-China tariff tensions, rising inflation hedges, and broader investor interest in digital assets as part of diversified portfolios. These dynamics have helped maintain confidence in spot Bitcoin and Ether ETFs despite broader market volatility.
Institutional Investors Remain Confident
Institutional investors have increasingly favored ETFs as a gateway to crypto markets, appreciating the regulatory clarity, reduced custody risk, and simplified trading mechanisms offered by these products. The recent inflows suggest that institutions are taking advantage of temporary market pullbacks to add exposure to digital assets.
Notably, Fidelity’s ETF products have been particularly popular, drawing millions in inflows from both institutional and high-net-worth investors. The data also indicates that investors are paying attention to fund performance, management quality, and security features, which can affect inflows even in turbulent markets.
Implications for Bitcoin and Ether
The rebound in US Bitcoin and Ether ETFs may also have a wider impact on the spot crypto market. ETF inflows can influence price trends, liquidity, and investor sentiment, particularly when combined with macroeconomic developments such as potential Fed rate cuts.
Some analysts suggest that sustained inflows into regulated ETFs may reduce the volatility typically associated with Bitcoin and Ether by channeling capital through structured investment vehicles. This may also encourage long-term holding and attract more conservative investors who were previously hesitant to invest in unregulated exchanges.
Looking Ahead
As market participants digest Powell’s comments and monitor ETF inflows, the coming weeks could prove crucial for cryptocurrency markets. Investors will be watching not only the direction of the Fed’s rate policy but also how continued inflows into US Bitcoin and Ether ETFs influence broader market trends.
The combination of macroeconomic signals and robust ETF performance underscores a maturing crypto ecosystem. Products like these ETFs provide a regulated, transparent, and accessible way for investors to participate in digital asset markets, reinforcing confidence during periods of volatility.
With Jerome Powell signaling possible easing and spot Bitcoin and Ether ETFs already demonstrating a strong recovery, investors may find opportunities to position themselves strategically ahead of potential market gains. The resilience of these ETFs highlights both the growing institutional adoption of cryptocurrencies and the evolving role of regulated financial instruments in shaping the crypto investment landscape.
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