Bitcoin ETFs Face Sharp Outflows After Fed Lowers Interest Rates

Spot Bitcoin exchange-traded funds in the U.S. faced a sharp reversal on Wednesday, recording their largest outflows in two weeks just as the Federal Reserve reduced interest rates by 25 basis points.

The policy shift triggered turbulence across both traditional and digital markets, briefly pushing Bitcoin down to $109,000 before a modest rebound.

Data from Farside Investors shows that a total of $470 million exited Bitcoin ETFs during the session. Fidelity’s FBTC led the withdrawals with $164 million, followed by ARK Invest’s ARKB with $143 million and BlackRock’s IBIT, which saw $88 million leave the fund. Grayscale’s GBTC lost another $65 million, while Bitwise’s BITB registered smaller outflows of around $6 million.

The setback came after a positive start to the week that saw roughly $350 million in combined inflows on Monday and Tuesday. Following Wednesday’s withdrawals, total net inflows across all U.S.-listed Bitcoin ETFs slipped to $61 billion, according to data from SoSoValue. Assets under management now stand near $149 billion, equivalent to about 6.7% of Bitcoin’s market capitalization.

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The Fed’s decision to lower rates – its second consecutive cut – failed to lift risk appetite. Investors appear uncertain about how long monetary easing will continue amid persistent inflation concerns. Markets steadied later in the day after reports of a meeting between U.S.

President Donald Trump and Chinese President Xi Jinping, which hinted at potential progress on trade relations. Despite the day’s turbulence, Bitcoin ETFs remain a dominant force in institutional holdings, collectively managing more than 1.5 million BTC worth an estimated $169 billion. BlackRock’s IBIT continues to lead the group with over 805,000 BTC, trailed by Fidelity’s FBTC and Grayscale’s GBTC.

Market volatility has done little to dampen long-term optimism among major Bitcoin backers. MicroStrategy chairman Michael Saylor reiterated his bullish view earlier this week, predicting that Bitcoin could reach $150,000 by the end of 2025 as adoption and institutional exposure deepen.