Bitcoin ETFs See $603M Inflows Amid Fed’s Hawkish Rate Cut Signals

US Bitcoin ETFs saw a slowdown in inflows last week after Fed Chair Jerome Powell’s hawkish comments on interest rate cuts. From May 12 to 16, Bitcoin ETFs brought in $603.74 million, a 35% decline from the $934 million the previous week, according to SoSoValue.

BlackRock’s IBIT was the top inflow last week with $841.7 million. Grayscale’s BTC and VanEck’s HODL saw $39.8 million and $7.3 million respectively. But not all funds were winners: Fidelity’s FBTC saw outflows of $122.2 million, Grayscale’s GBTC and ARK 21Shares’ ARKB lost around $70 million each. Bitwise’s BITB and Invesco’s BTCO also saw slight redemptions.

Despite the weekly slowdown, May’s total inflows are strong at $2.64 billion, close to April’s $2.97 billion. Since January 2024, Bitcoin ETFs have seen over $41 billion in net inflows.

Ethereum ETFs Bounce Back

Ethereum ETFs reversed last week’s outflows and saw $41.59 million in net inflows across 9 funds. That’s a big turnaround from the $38.15 million outflows the previous week. Investors are getting back into Ethereum.

Fed Hawkish Tone Causes Market Volatility

The recent caution in the crypto market is due to Fed Chair Powell’s comments after the April PPI showed a 0.5% drop, which means inflation is easing. Powell said the Fed needs “sustained evidence” of cooling inflation before cutting rates. He also mentioned high real interest rates and unpredictable global risks like tariffs and supply shocks that make monetary policy decisions complicated.

Key market moves:

• Total crypto market cap dropped 3.3% in 24 hours to $3.35 trillion

• Bitcoin down 0.7% to around $103,000

• Ethereum down 4.8% below $2,400, testing support

The initial euphoria after the US-China tariff rollback agreement has worn off after Treasury Secretary Scott Bessent said tariffs could be re-imposed quickly if talks fail.

Ruslan Lienkha, Chief of Markets at YouHodler, calls it a normal correction within a bigger uptrend but warns global uncertainty and high US interest rates will cap gains.

Now we wait for the May 30 PCE release, the Fed’s preferred inflation measure, to guide rate decisions and market mood.