Key facts
- US spot Bitcoin ETFs lost $82 million and Ether ETFs lost $29 million on Wednesday.
- Outflows were observed across multiple Bitcoin ETFs, including BlackRock's IBIT and ARKB.
- The Federal Reserve's updated projections indicated a higher expected policy rate for 2026 and a possibility of a rate hike this year.
- Market expectations for an October rate hike increased significantly.
- The total crypto market value held steady, and Bitcoin prices saw a slight pullback.
US spot Bitcoin and Ether ETFs experienced significant outflows on Wednesday, totaling $111 million, indicating a potential cooling of institutional interest. Bitcoin funds saw $82 million in outflows, with notable funds like BlackRock's IBIT and ARKB reporting losses. Ether funds followed with $29 million in outflows, and all ether-focused ETFs finished the day in negative territory.
The shift in investor sentiment appears linked to the Federal Reserve's latest policy meeting. While the Fed kept its benchmark interest rate unchanged at 3.50% to 3.75%, the accompanying projections were hawkish. The median forecast now suggests the policy rate will end 2026 at 3.8%, an increase from the previous 3.4% projection. Furthermore, nine of the 18 Federal Open Market Committee officials indicated a potential rate hike within the current year. This has led markets to price in nearly a 60% probability of an increase as soon as October.
The prospect of higher-than-anticipated interest rates has stalled the recent recovery rally in the crypto market. The total market value has remained flat around $2.26 trillion, and Bitcoin has eased to approximately $63,800. The previous optimism, fueled by expectations of rate cuts and easing inflation, has been replaced by concerns over a Fed leaning towards tightening monetary policy.