Bitcoin and Ethereum ETFs See Inflows As Jerome Powell Hints at Rate Reductions

US spot Bitcoin and Ethereum ETFs saw strong inflows on Tuesday after Federal Reserve Chair Jerome Powell said interest rates might be cut before the end of the year. Investors reacted quickly, bringing attention back to digital assets amid market uncertainty. These inflows come after heavy outflows the previous day, signaling growing confidence in crypto investments.

Bitcoin and Ether ETFs See Renewed Interest

Spot Bitcoin ETFs saw $102.58 million in net inflows on Tuesday, recovering from Monday’s $326 million outflow, according to SoSoValue. Fidelity’s Wise Origin Bitcoin Fund (FBTC) led with $132.67 million, while BlackRock’s iShares Bitcoin Trust (IBIT) had a small outflow of $30.79 million. Total assets across all spot Bitcoin ETFs reached $153.55 billion, about 7% of Bitcoin’s market value.

Ethereum ETFs also recovered, gaining $236.22 million after Monday’s $428 million outflow. Fidelity’s Ethereum Fund (FETH) led with $154.62 million, followed by Grayscale’s Ethereum Fund at $34.78 million and Bitwise’s Ethereum ETF at $13.27 million. These flows show that investors still want regulated crypto exposure.

The rebound shows that institutional investors are becoming more active in crypto. ETFs provide an easy and regulated way to invest without holding digital assets directly, which has improved liquidity and reduced volatility.

Easing Monetary Policy Could Increase ETF Inflows

Federal Reserve Chair Jerome Powell said the US central bank may soon slow or stop reducing its balance sheet and could also consider lowering interest rates. At the National Association for Business Economics conference, he noted that liquidity is somewhat higher than what is normal for a healthy market.

Vincent Liu, chief investment officer at Kronos Research, said an October rate cut could boost market activity, with crypto and ETFs seeing more investment. Lower rates make digital assets more attractive for investors looking for returns outside traditional savings and bonds.

Investors see Powell’s comments as a sign that the Fed may take a more supportive approach. With a slowing labor market and weaker economic growth, the central bank could act sooner than expected.

ETFs Stay Resilient Amid Market Volatility

Crypto investment products have stayed strong despite recent market swings. CoinShares reports that last week’s flash crash, caused by US-China tariff tensions, led to only $159 million in outflows, even though $20 billion in positions were liquidated across exchanges. Total inflows for 2025 have reached $48.7 billion, already higher than last year’s total.

ETFs and other crypto products are showing that the market is becoming more mature. Investors are treating digital assets as part of a diversified portfolio instead of just speculative tools. Seasonal trends, geopolitical events, and economic signals still affect flows, but overall confidence is cautiously positive. Analysts also note that movements in gold complement crypto inflows. This suggests cryptocurrencies may act more as a hedge or alternative store of value during uncertain times.

What Do the Recent ETF Inflows Suggest?

Recent inflows into Bitcoin and Ethereum ETFs show growing trust in regulated crypto products. Even with market ups and downs and global tensions, investors are seeing ETFs as an easy and safe way to access digital assets without owning them directly. The Federal Reserve’s hints at lowering interest rates could make crypto investments even more appealing.