On Wednesday, U.S. spot Bitcoin exchange-traded funds experienced net outflows as investors took the opportunity to realize profits and reposition themselves ahead of Fed Chair Jerome Powell’s upcoming speech.
Summary
- On Wednesday, U.S. Bitcoin ETFs logged $470.7 million in net outflows.
- Spot ETF funds terminated their inflow streak, with Bitcoin failing to rise despite announced interest rate cuts in the U.S.
- Jerome Powell has expressed skepticism about the possibility of another rate cut this year.
As per SoSovalue’s data, the twelve spot Bitcoin ETFs reported $470.71 million in net outflows on October 29, breaking a four-day streak of inflows that accumulated around $462.7 million.
Fidelity’s FBTC and ARK 21Share’s ARKB led the outflows, with $164.36 million and $143.8 million leaving the respective funds. BlackRock’s IBIT and Grayscale’s GBTC also saw outflows of $88 million and $65 million, with no BTC funds recording inflows on that day.
The total trading volume for these investment instruments reached $7.07 billion, a considerable increase from the $4.18 billion noted the previous day.
Simultaneously, Ethereum ETFs joined the trend, experiencing $81.44 million in outflows after two consecutive days of net inflows.
The outflows from both Ethereum and Bitcoin ETFs likely reflect investor decisions to secure profits and adopt a more cautious posture ahead of Federal Reserve Chair Jerome Powell’s remarks following the FOMC meeting conclusion.
Though the Fed’s 25bps rate cut aligned with most analysts’ projections, Bitcoin (BTC) and Ethereum (ETH) dipped as traders engaged in profit-taking, embodying the classic “buy the rumor, sell the news” scenario.
Powell also tempered hopes for another rate cut within this year, dampening the optimism that had built up among bulls in recent weeks.
“A further reduction in the policy rate at the December meeting is not a foregone conclusion. Far from it, policy is not on a preset course,” Powell informed reporters, adding that decisions would be heavily influenced by incoming economic data.
At the time of writing, both BTC and ETH had decreased by nearly 3% in the past 24 hours, trading around $110,000 and $3,910, respectively.
Another significant factor contributing to the declines was a substantial increase in liquidations across the broader crypto market. CoinGlass data indicated that crypto liquidations surged by 75% to $594 million yesterday, affecting over 146,000 traders. Bitcoin and Ethereum constituted the largest portions of these losses.
Andrew Forson, president of DeFi Technologies, remarked on the wider macro environment, commenting that as earnings season progresses, market sentiment will likely respond to corporate results and future guidance. He noted that while robust earnings could bolster market confidence in recovery, disappointing figures may highlight the uneven impact of current economic conditions.
“Generally, a low-rate environment tends to favor both equities and digital assets, positioning this backdrop as generally positive for crypto as investors turn to alternative and growth-oriented assets,” Forson stated.
However, some analysts continue to maintain a bullish long-term outlook. Among them, Matt Mena, a Crypto Research Strategist at 21Shares, believes Bitcoin could achieve new all-time highs by year-end, bolstered by “policy tailwinds, liquidity rotation, and a convergence of positive sentiment.”
“The stage is set for Bitcoin to decisively exceed its previous peak of $124k, possibly concluding the year in the $130K–$150K range, with Ethereum projected between $5k-6k,” Mena commented in discussions with crypto.news.
Disclosure: This article does not constitute investment advice. The content and materials presented on this page are for educational purposes only.
