Bitcoin and Ether ETFs Experience Withdrawals as Fed Signals Inflation Concerns

Spot Bitcoin and Ether ETFs experienced outflows on Friday, coinciding with the Federal Reserve’s release of significant inflation data indicating rising price pressures related to President Donald Trump’s trade policies.

As reported by SoSoValue data, Ether (ETH) ETFs saw a net outflow of $164.64 million, reversing a five-day inflow streak that had added over $1.5 billion to the asset class.

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

Fidelity’s FBTC experienced the largest single-day outflow at $66.2 million among Bitcoin ETFs. ARK Invest and 21Shares’ ARKB followed with a $72.07 million net withdrawal, while Grayscale’s GBTC experienced an outflow of $15.3 million. 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 development: ‘Floodgates about to open’

Fed releases unexpectedly high core inflation

The outflows coincide with the Fed’s preferred inflation measure, the core Personal Consumption Expenditures (PCE) index, which indicated a 2.9% annualized increase in July, the highest since February.

The report, which matched predictions, emerged amid increasing evidence that Trump’s tariff policies are exerting pressure on core prices by inflating import costs, according to CNBC.

The Trump administration has enforced a baseline 10% tariff on all imports and has targeted additional categories with reciprocal duties. While energy prices have contributed to keeping overall inflation stable, services prices surged by 3.6% year-over-year.

Despite the inflation uptick, the market continues to factor in the possibility of a Federal Reserve rate cut at its next meeting, especially if labor market data shows more signs of weakness, as highlighted in the CNBC report.

Related: US ETFs now play a significant role in Bitcoin spot trading volume

Ether ETFs soar as corporate treasuries drive demand

Since their launch in July 2024, Ether spot ETFs have gained traction, witnessing a 44% increase in net inflows in August, rising from $9.5 billion to $13.7 billion. Analysts link this growth to a resurgence of institutional interest after a period of underperformance compared to Bitcoin.

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