Bitcoin and Ethereum ETFs recorded significant net outflows, despite the U.S. Federal Reserve's announcement of a 50 basis point rate cut.
What Happened: Bitcoin BTC/USD spot ETFs had a net outflow of $52.827 million, the first outflow after four days of inflows. Grayscale's Bitcoin ETF GBTC saw an additional $8.1347 million outflow.
Ethereum ETH/USD spot ETFs followed suit with a total net outflow of $9.738 million, while Grayscale's Ethereum ETF ETHE lost $14.6629 million. However, BlackRock's Ethereum ETF ETHA saw a net inflow of $4.9249 million, standing out from the overall trend.
QCP Capital explained that the Fed's decision to cut rates, while expected by many, caused a shift towards riskier assets like cryptocurrencies.
Despite Federal Reserve Chair Jerome Powell leaving uncertainty about future rate cuts, the move has led to increased optimism in the markets, reflected in the U.S. treasury market.
QCP also noted that Bitcoin's price rose from $59,000 to $62,000, while Ethereum is trading near $2,400 following the Fed's announcement.
Greekslive also highlighted that the Fed's rate cut exceeded some expectations, pushing cryptocurrency prices higher while U.S. stocks lagged.
They pointed out that investors' expectations for market volatility have dropped significantly, with short-term selling pressure easing.
However, they also cautioned that with upcoming interest rate decisions in November and December, and the U.S. election on the horizon, market volatility could increase again later this year.
What’s Next: The influence of Bitcoin as an institutional asset class is expected to be thoroughly explored at Benzinga’s upcoming Future of Digital Assets event on Nov. 19.
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