In a surprising turn of events, spot Bitcoin reached $117,287.46 as exchange-traded funds (ETFs) experienced their first daily outflows in over a week on Wednesday. Investors reacted to the Federal Reserve’s unexpectedly cautious outlook, resulting in a net outflow of $51.28 million. This shift ended a seven-day streak during which nearly $3 billion had flowed into the market. Despite the outflows, assets under management remain robust, exceeding $150 billion according to SoSoValue data.
The change in market sentiment followed remarks from Fed Chair Jerome Powell, who highlighted economic uncertainty and indicated a more conservative approach to future rate cuts than traders had anticipated. The Federal Reserve implemented a 25 basis point reduction in its benchmark interest rate, bringing it to a range of 4.00% to 4.25% in its first cut of the year. However, the real shock came from the updated projections, which suggested only two more cuts in 2025 and signaled fewer reductions in 2026 than previously priced in by the market.
During a cautious press conference, Powell noted concerns over “elevated” inflation and increasing “downside risks” to employment. These remarks contributed to a perception of a hawkish stance despite the rate cut, leading to a mild pullback in various risk assets.
Ethereum ETFs also faced challenges, registering outflows for the second consecutive day, with withdrawals totaling $1.89 million following a significant exit of $61.7 million the previous day.
Conversely, cryptocurrency prices showed slight resilience, with Bitcoin increasing by approximately 0.3% over the last 24 hours, while Ether saw a rise of 1.7%. The broader CoinDesk 20 index also made gains, rising by 2%.
