Bitcoin ETFs See Significant Outflows Ahead of Fed Chair Jerome Powell’s Speech
U.S. spot Bitcoin exchange-traded funds saw net outflows again on Wednesday as investors took profits and repositioned ahead of Fed Chair Jerome Powell’s speech.
According to data from SoSovalue, the 12 spot Bitcoin ETFs recorded net outflows of $470.71 million on October 29, ending a string of consecutive inflows over the previous four days that netted the funds around $462.7 million. This significant outflow suggests that investors are becoming increasingly cautious about the market’s prospects, particularly in light of the Federal Reserve’s recent decision to cut interest rates by 25 basis points.
Breakdown of Outflows
Fidelity’s FBTC and ARK 21Share’s ARKB led the outflows with $164.36 million and $143.8 million leaving the funds, respectively. BlackRock’s IBIT fund and Grayscale’s GBTC fund lost $88 million and $65 million, respectively. None of the BTC funds recorded inflows on the day, indicating a widespread trend of investors pulling out of the market.
The trading volume of these investment instruments amounted to $7.07 billion, significantly higher than the previous day’s $4.18 billion. This surge in trading volume suggests that investors are actively repositioning their portfolios in response to changing market conditions.
Ethereum ETFs Also See Outflows
Meanwhile, its Ethereum counterparts also resumed outflows, with $81.44 million flowing out after two consecutive days of net inflows. This trend is consistent with the broader market sentiment, as investors appear to be taking a more cautious stance ahead of the Federal Reserve’s future decisions.
Outflows from both Ethereum and Bitcoin ETFs likely occurred as investors opted to book profits and take a more cautious stance ahead of Federal Reserve Chairman Jerome Powell’s press release following the conclusion of yesterday’s FOMC meeting. Although the Fed’s 25 basis point rate cut was in line with most analysts’ expectations, Bitcoin (BTC) and Ethereum (ETH) fell as traders sold the news – a classic case of “buy the rumor, sell the news.”
Fed Chair Jerome Powell’s Comments
Powell also dashed hopes of another rate cut this year, dashing the optimism that bulls had built up in recent weeks. “A further rate cut at the December meeting is not a given. On the contrary, policy is not on a predetermined 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% in the last 24 hours, trading at around $110,000 and $3,910, respectively. Another major reason for these assets’ losses was a significant increase in liquidations in the broader crypto market. Data from CoinGlass showed that crypto liquidations rose 75% to $594 million yesterday, with over 146,000 traders being liquidated. Bitcoin and Ethereum accounted for the majority of these losses.
Expert Insights
Commenting on the broader macroeconomic situation, Andrew Forson, President of DeFi Technologies, told crypto.news that market sentiment will likely continue to react to company results and future forecasts as earnings season progresses. He added that while strong earnings could boost the market’s confidence in a recovery narrative, disappointing numbers could reveal the uneven strain of the current economic situation.
“Overall, a lower interest rate environment tends to be positive for both equities and digital assets, and we view this backdrop as broadly positive for crypto as investors look to alternative and growth-oriented assets,” Forson said.
Still, some analysts remain optimistic about the longer-term outlook. 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 “political tailwinds, liquidity rotation and positive sentiment convergence.”
“The stage is set for Bitcoin to decisively surpass its $124,000 peak and potentially end the year in the $130,000-$150,000 range, while Ethereum trades in the $5,000-$6,000 range,” Mena wrote in a commentary to crypto.news.
Disclosure: This article does not constitute investment advice. The content and materials presented on this site are for educational purposes only.
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