Bitcoin and Ether ETFs Experience Withdrawals as Fed Signals Inflation Concerns

Spot Bitcoin and Ether ETFs experienced outflows on Friday, following the Federal Reserve’s release of critical inflation data indicating increasing price pressures under President Donald Trump’s trade strategies.

According to SoSoValue data, Ether (ETH) ETFs reported a net outflow of $164.64 million, reversing five consecutive days of inflows that had contributed over $1.5 billion to this asset class.

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

Fidelity’s FBTC recorded the largest single-day outflow of $66.2 million among Bitcoin ETFs. ARK Invest and 21Shares’ ARKB followed with a $72.07 million net withdrawal, while Grayscale’s GBTC faced a $15.3 million exit. Only a handful of funds noted slight inflows, including BlackRock’s IBIT which gained $24.63 million and WisdomTree’s BTCW with an addition of $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 unveiling of the Fed’s favored inflation measure, the core Personal Consumption Expenditures (PCE) index, indicating a 2.9% annualized increase in July, the highest since February.

The report, aligning with predictions, emerged amid clear indications that Trump’s tariff policies are exerting pressure on core prices by elevating import expenses, according to CNBC.

Trump’s administration has enforced a baseline 10% tariff on all imports, targeting additional categories via reciprocal duties. Although energy prices have helped keep overall inflation stable, service costs surged by 3.6% year-over-year.

In spite of the inflation increase, the market continues to speculate on a potential Federal Reserve rate cut in its upcoming meeting, especially if labor market data indicates further declines, as per 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 inception in July 2024, Ether spot ETFs have steadily gained popularity, with net inflows increasing by 44% in August, from $9.5 billion to $13.7 billion. Analysts link this growth to a resurgence of institutional interest following a time of underperformance compared to Bitcoin.

Adoption of Ether by corporate treasuries is also growing. Companies currently possess 4.4 million ETH, worth over $19 billion, approximately 3.7% of the total supply, according to StrategicETHReserve.