US Bitcoin and Ether ETFs rebound as Powell signals rate cuts
News Summary
US spot Bitcoin and Ether exchange-traded funds (ETFs) saw inflows on Tuesday after Federal Reserve Chair Jerome Powell hinted at potential further rate cuts before year-end. Spot Bitcoin ETFs recorded $102.58 million in net inflows, reversing a $326 million outflow from the previous day, with Fidelity’s Wise Origin Bitcoin Fund (FBTC) leading the gains. Total net assets across all spot Bitcoin ETFs reached $153.55 billion, representing 6.82% of Bitcoin’s market cap. Ether ETFs mirrored this turnaround, recording $236.22 million in net inflows following Monday’s steep $428 million outflow, with Fidelity’s Ethereum Fund (FETH) topping the list. Speaking at the National Association for Business Economics conference, Powell indicated that the Fed is nearing the end of its “quantitative tightening” program and preparing for potential rate cuts as the labor market weakens. Analyst Vincent Liu suggested an October rate cut would ignite markets, driving liquidity into crypto and ETFs. Despite recent market turbulence, including a flash crash due to renewed US-China tariff tensions, crypto investment products demonstrated strong resilience, with total inflows for 2025 reaching $48.7 billion, surpassing last year's total.
Background
It is currently 2025, and President Donald J. Trump has been re-elected, with his administration's economic policies likely favoring growth stimulation. Against this backdrop, the Federal Reserve's monetary policy is particularly crucial. After a period of tightening, markets widely anticipate the Fed to pivot towards an easing cycle to address potential weakening in the labor market. The cryptocurrency market, particularly Bitcoin and Ether, has become part of mainstream investment following the approval of spot ETFs in 2024. The influx of institutional capital has made it more sensitive to macroeconomic policies, especially interest rate changes. Every policy statement from the Federal Reserve can directly impact market sentiment and capital flows into digital assets.
In-Depth AI Insights
What are the deeper implications of Powell's dovish signals for broader asset allocation? - Powell's hints at rate cuts and the end of quantitative tightening signal increased liquidity in the global financial system, which typically drives capital from lower-risk assets to those with higher risk and growth potential. - For cryptocurrencies, this not only implies liquidity-driven price appreciation but, more importantly, reinforces their narrative as an inflation hedge and