Investors Siphon $5 Billion from Crypto ETFs Ahead of Fed Policy Update

Yesterday’s U.S. Bitcoin and Ethereum spot ETFs experienced significant net outflows, with Bitcoin ETFs losing $2.534 billion and Ethereum ETFs shedding $2.512 billion, according to data from SoSoValue. This marked a reversal from recent inflow trends and highlighted shifting institutional and retail investor sentiment amid evolving macroeconomic conditions. The outflows followed a sharp $439 million exit on September 22 and came as investors repositioned portfolios ahead of the Federal Reserve’s upcoming inflation data and policy decisions.

Bitcoin spot ETFs, which hold $147.2 billion in net assets as of September 23, saw Fidelity’s FBTC lead withdrawals with $75.6 million, while BlackRock’s IBIT managed a modest $2.5 million inflow. Ethereum ETFs fared worse, with Fidelity’s FETH accounting for $63.4 million in outflows and Grayscale’s ETH fund losing $36.4 million. Cumulative inflows for Bitcoin ETFs stand at $57.25 billion, representing 6.6% of Bitcoin’s total market cap, while Ethereum ETFs hold $27.5 billion, or 5.45% of the ETH market.

The outflows reflect a broader trend of capital rotation within the crypto asset class. Earlier in August 2025, Ethereum ETFs attracted $3.9 billion in inflows, driven by growing institutional adoption of Ethereum staking and its expanding DeFi ecosystem. In contrast, Bitcoin ETFs recorded their first major outflow in weeks during the same period, signaling a temporary cooling in institutional demand. Analysts attribute the recent redemptions to profit-taking after Bitcoin’s peak near $124,000 in early September and cautious positioning ahead of macroeconomic updates.

BlackRock’s Bitcoin and Ethereum ETFs remain pivotal to the sector, generating over $260 million in annual revenue for the asset manager, with $218 million attributed to Bitcoin products and $42 million to Ethereum. Onchain Foundation’s Leon Waidmann noted that crypto ETFs have transitioned from experimental products to core revenue streams for traditional financial institutions. Bloomberg’s Eric Balchunas emphasized their structural advantages, including instant access, low costs, and regulatory oversight, which appeal to institutional investors.

The outflows underscore the sensitivity of ETF flows to macroeconomic signals. Bitcoin traded at $113,717 on September 23, up 0.9% in the past 24 hours but fluctuating within a narrow range. Ethereum slipped 0.4% to $4,173.88, marking a 7.1% decline over the week. Market observers highlight that ETF inflows and derivatives leverage will remain key indicators as investors navigate the Fed’s policy trajectory and inflation readings.