Investors Flock to Bitcoin ETFs as Fed Eases and SEC Speeds Approval

Bitcoin is poised to benefit from the Federal Reserve’s rate cut decision, which reduced the federal funds rate by 25 basis points, setting the target range at 4.25%–4.50%. The move is expected to ease financial conditions, weaken the U.S. dollar, and support risk assets, including the cryptocurrency market. The broader market is closely watching how Bitcoin and other digital assets react, given their sensitivity to macroeconomic shifts.

Recent data shows a significant increase in demand for Bitcoin through exchange-traded funds (ETFs). Global Bitcoin ETPs recorded net inflows of 20,685 BTC in the week leading up to the Fed’s decision, marking the highest weekly intake since mid-July 2025. U.S.-listed Bitcoin ETFs accounted for nearly 97% of these flows, reflecting a pronounced shift back to Bitcoin from Ethereum ETFs as investors position for macroeconomic changes. Fidelity’s FBTC led the inflows, capturing $843 million in net inflows, or 36% of the total $2.34 billion across all funds.

The easing of Federal Reserve policy is expected to provide further support to Bitcoin as ETF inflows continue to outpace supply. Inflows have significantly exceeded new supply growth over the past month, with investors accumulating 22,853 BTC through ETFs compared to 14,056 BTC in new supply. Analysts at K33 Research have highlighted that ETF activity has been a primary driver of Bitcoin’s strength since the approval of spot ETFs in January 2024.

Simultaneously, the U.S. Securities and Exchange Commission (SEC) has taken a significant step toward accelerating the approval of new crypto spot ETFs by introducing a streamlined listing framework. The agency approved generic listing standards that will apply to a range of digital assets, including cryptocurrencies such as Solana and XRP. This change reduces the approval process from a maximum of 240 days to 75 days, effectively removing a major regulatory barrier. SEC Chair Paul Atkins emphasized that the new rules will foster innovation and reduce entry barriers for digital asset products.

The new framework is expected to open the door for a wave of new spot crypto ETFs, with the first likely to launch as early as October 2025. Asset managers are already working under the new rules, and the expedited approval process is expected to attract more institutional and retail investors to the crypto market. Steve Feinour, a partner at Stradley Ronon, noted that most asset managers are expected to pursue the expedited approval pathway for ETFs tied to cryptocurrencies with existing CFTC-regulated futures contracts.

Despite the strong inflows and positive regulatory developments, Bitcoin’s volatility remains muted. The cryptocurrency’s seven-day volatility fell to yearly lows below 0.7% last week before modestly increasing as prices climbed above $115,000. Analysts caution that with low volatility, high offshore leverage, and few immediate catalysts beyond the Fed’s policy move, directional signals remain mixed. However, the broader trend suggests that Bitcoin will continue to benefit from both macroeconomic easing and the growing institutional adoption of crypto products.

As the market awaits the full impact of the Fed’s rate cut and the potential launch of new ETFs, Bitcoin is currently consolidating near its recent highs, with bulls showing resilience near key support levels. The upcoming developments in both the regulatory and macroeconomic fronts are expected to shape the next phase of Bitcoin’s price action and ETF performance.