U.S. exchange-traded Bitcoin funds returned to net outflows on Wednesday as investors took profits and repositioned themselves ahead of Fed Chairman Jerome Powell’s speech.
Summary
- US Bitcoin ETFs recorded net outflows of $470.7 million on Wednesday.
- Spot ETF funds broke through inflows as Bitcoin failed to recover even after US interest rate cuts were announced
- Fed Chairman Jerome Powell has cast doubt on the likelihood of another rate cut this year.
According to facts from SoSovalue, the 12 spot Bitcoin ETFs recorded net outflows of $470.71 million on Oct. 29, ending a string of consecutive inflows over the previous four days, which collected about $462.7 million into the funds.
Fidelity’s FBTC and ARK 21Share’s ARKB led the outflows with $164.36 million and $143.8 million, leaving the funds. BlackRock’s IBIT funds and Grayscale’s GBTC funds lost $88 million and $65 million, respectively. None of the BTC funds saw inflows that day.
Trading volume for these investment vehicles reached $7.07 billion, significantly higher than the $4.18 billion recorded the day before.
Meanwhile, their Ethereum counterparts also resumed outflows, with $81.44 million flowing out of the funds after two straight days of net inflows.
The outflows from both Ethereum and Bitcoin ETFs likely came as investors opted to book profits and take a more cautious stance ahead of Fed Chairman Jerome Powell’s press statement following the conclusion of yesterday’s FOMC meeting.
While the Fed’s 25 basis point rate cut was in line with most analyst expectations, Bitcoin (BTC) and Ethereum (ETH) fell as traders sold the news, a classic case of “buy the rumor, sell the news.”
Powell also poured cold water on hopes for another rate cut this year, undermining the optimism bulls had built up in recent weeks.
“A further cut in the policy rate at the December meeting is not a foregone conclusion. On the contrary, policy is not on a set course,” Powell told reporters, adding that the decision would depend heavily on incoming economic data.
At the time of writing, both BTC and ETH are down almost 3% over the past 24 hours, trading around $110,000 and $3,910 respectively.
Another major reason why these assets suffered losses was a significant increase in liquidations in the broader crypto market. Facts from CoinGlass showed that crypto liquidations rose 75% yesterday to $594 million, with more than 146,000 traders liquidated. Bitcoin and Ethereum accounted for the majority of these losses.
Commenting on the broader macro setup, Andrew Forson, president of DeFi Technologies, told crypto.news that as earnings season unfolds, market sentiment will likely remain reactive to company results and future expectations. He added that while strong gains could boost market confidence in a recovery story, disappointing numbers could reveal the uneven toll of current economic conditions.
“Overall, a lower interest rate environment is generally constructive for both equities and digital assets, and we see this backdrop as broadly positive for crypto as investors look to alternative and growth-oriented assets,” Forson said.
Nevertheless, some analysts remain optimistic about the longer-term prospects. Among them was Matt Mena, a Crypto Research Strategist at 21Shares, who believes Bitcoin could reach new all-time highs by the end of the year, supported by “policy tailwinds, liquidity rotation and positive sentiment converging.”
“The stage is set for Bitcoin to definitively surpass its $124,000 peak and potentially end the year in the $130,000 – $150,000 range, while Ethereum trades in the $500,000 range,” Mena wrote in commentary on crypto.news.
Disclosure: This article does not represent investment advice. The content and materials on this page are for educational purposes only.
