Bitcoin & Ethereum ETFs: How US Investors Reacted to Fed’s Rate Cut Week

Introduction

It was a pivotal week for financial markets as the central bank of the world’s strongest economy slashed key interest rates by 0.5%. This move had significant implications for local investors, particularly in their interactions with spot Bitcoin and Ethereum ETFs.

BTC ETFs on the Inflow Side

Investors’ Rollercoaster Ride

• Pre-FOMC Meeting: US investors were aggressively buying spot Bitcoin ETFs, with net inflows reaching over $500 million in just four trading days.
• Rate Cut Day: The trend reversed dramatically, resulting in $52.7 million in net outflows.
• Post-Cut Recovery: Investors quickly changed course again, leading to $158.3 million and $92 million in net inflows on Thursday and Friday respectively.

Weekly Summary:

• Total weekly net inflows amounted to $397.2 million.

Noteworthy Observations:

• BlackRock’s IBIT ETF saw minimal activity since August 26, except for one positive day on September 15.
• Fidelity’s FBTC ETF attracted substantial investments on multiple days including September 17 ($56.6M), September 19 ($49.9M), and September 20 ($26.1M).

Ethereum ETFs See Positive Streak

Mixed Signals

Despite a lackluster two months of trading on US exchanges:

• Minor Positives: Two consecutive days of net inflows were recorded – $5.2 million on Thursday and $2.9 million on Friday.

However:

• Overall Weekly Performance: The week ended negatively with total net outflows amounting to $26.2 million due to significant withdrawals earlier in the week.

Conclusion

The Fed’s rate cut created a volatile environment for both Bitcoin and Ethereum ETFs, showcasing investor uncertainty but also resilience as they adjusted their strategies rapidly throughout the week.

References

1. CryptoPotato – This is How US-Based Bitcoin & Ethereum Investors are Preparing for the FOMC Meeting
2. FarSide – Bitcoin ETF Flow All Data
3. FarSide – ETH