Bitcoin, Ether ETFs See Outflows Amid Inflation Concerns
Crypto ETFs Under Pressure: Bitcoin and Ether See Outflows
Spot Bitcoin and Ether ETFs faced a challenging Friday, recording net outflows as the Federal Reserve released inflation data indicating rising price pressures. This shift comes amid market speculation about the Fed's next moves regarding interest rates.
Ether ETF Reversal
Ether (ETH) ETFs experienced a significant reversal, with net outflows of $164.64 million, according to SoSoValue data. This ends a streak of five days of inflows that had added over $1.5 billion to the asset class. This fluctuation underscores the volatile nature of digital asset investments in response to macroeconomic indicators.
Bitcoin ETFs Also in the Red
Bitcoin (BTC) ETFs mirrored this trend, reporting $126.64 million in net outflows, their first daily loss since Aug. 22. Total assets under management now stand at $28.58 billion for Ethereum and $139.95 billion for Bitcoin. This collective outflow highlights investor sensitivity to inflation-related news.
Individual ETF Performance
Fidelity's FBTC saw the largest single-day outflow among Bitcoin ETFs at $66.2 million. ARK Invest and 21Shares' ARKB followed with a net withdrawal of $72.07 million, while Grayscale's GBTC experienced a $15.3 million exit. Only BlackRock's IBIT ($24.63 million inflow) and WisdomTree's BTCW ($2.3 million inflow) posted minor gains.
Inflation Data Weighs on Market Sentiment
The outflows coincided with the release of the core Personal Consumption Expenditures (PCE) index, the Fed’s preferred inflation gauge. The data revealed a 2.9% annualized rise in July, the highest since February. This figure reinforces concerns about persistent inflationary pressures.
While energy prices have helped to moderate overall inflation, service sector costs jumped 3.6% year-over-year, indicating broad-based price increases. Despite the inflation data, market participants still anticipate a potential Federal Reserve rate cut at its next meeting, particularly if upcoming labor market data shows signs of weakening.
Ether ETFs See Growth Driven by Institutional Interest
Since their launch in July 2024, Ether spot ETFs have steadily gained traction. August saw net inflows rise by 44%, from $9.5 billion to $13.7 billion. Analysts point to a resurgence in institutional interest as a driving factor, following a period where Ether underperformed 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 the total supply, according to StrategicETHReserve.