Bitcoin and Ether ETFs Experience Withdrawals as Fed Signals Inflation Concerns

Spot Bitcoin and Ether ETFs experienced outflows on Friday, coinciding with the release of key inflation data from the Federal Reserve, which indicated that price pressures are increasing under President Donald Trump’s trade policies.

According to SoSoValue data, Ether (ETH) ETFs saw a net outflow of $164.64 million, ending a five-day streak of inflows that added over $1.5 billion to the asset class.

Bitcoin (BTC) ETFs also reported negative figures with $126.64 million in net outflows, marking the first daily decline since August 22. Total assets under management fell to $28.58 billion for Ethereum and $139.95 billion for Bitcoin.

Fidelity’s FBTC had the highest single-day outflow at $66.2 million among Bitcoin ETFs. ARK Invest and 21Shares’ ARKB followed with net withdrawals of $72.07 million, while Grayscale’s GBTC saw $15.3 million leave. Only a handful of funds saw minor inflows, with BlackRock’s IBIT gaining $24.63 million and WisdomTree’s BTCW adding $2.3 million.

Related: 92 crypto-related ETPs in the works: ‘Floodgates to open soon’

Fed releases hotter-than-expected core inflation

The outflows coincided with the release of the Fed’s preferred inflation measure, the core Personal Consumption Expenditures (PCE) index, revealing a 2.9% annualized increase in July, the highest level since February.

The report, aligning with forecasts, emerged amid rising evidence that Trump’s tariff policies are exerting upward pressure on core prices by increasing import costs, according to CNBC.

The Trump administration has imposed a baseline 10% tariff on all imports and targeted additional categories with reciprocal duties. Although energy prices have helped to stabilize overall inflation, services have surged by 3.6% year-over-year.

Despite the inflation uptick, the market is still anticipating a potential Federal Reserve rate cut in its next meeting, especially if labor market data indicates further weaknesses, as noted in the CNBC report.

Related: US ETFs now a major source of Bitcoin spot trading volume

Ether ETFs surge as corporate treasuries fuel demand

Since their debut in July 2024, Ether spot ETFs have gained momentum, with net inflows increasing by 44% in August, rising from $9.5 billion to $13.7 billion. Analysts attribute this growth to a resurgence in institutional interest following a downturn relative to Bitcoin.

Corporate treasury adoption of Ether is also on the rise. Companies now hold 4.4 million ETH, valued at over $19 billion, representing approximately 3.7% of total supply, according to StrategicETHReserve.