Bitcoin ETF Outflow Breaks Inflow Streak, But Fed Rate Cut and SEC Greenlight Signal Bullish Future

The U.S. Bitcoin spot ETF market has hit a speed bump after a period of strong momentum. On September 17, these funds recorded a net outflow of $51.28 million, snapping a seven-day streak of consecutive inflows that had renewed institutional optimism. The reversal was a sharp contrast to the previous day, which saw a massive $292.27 million pour into the products.

While Bitcoin ETFs took a breather, Ethereum funds continued to struggle, extending a period of consistent withdrawals that has persisted since early September.

Bitcoin ETF Inflow Streak Snapped, Ethereum Funds Continue to Bleed

The sudden shift in Bitcoin ETF flows was driven by significant repositioning among major issuers. Here’s a breakdown of the day’s activity:

A Mixed Picture for Bitcoin ETFs

The outflows were led by major players, with Fidelity’s FBTC recording a substantial $116.03 million withdrawal and Grayscale’s GBTC seeing $62.64 million exit. Ark and 21Shares’ ARKB also shed $32.29 million.

However, the selling was not universal. BlackRock’s iShares Bitcoin Trust (IBIT) defied the trend, attracting an impressive $149.73 million in new capital. This strong performance highlights continued demand for the market-leading ETF, though it wasn’t enough to offset the day’s broader redemptions.

Despite the daily outflow, the cumulative net inflows for all Bitcoin spot ETFs since their launch remain robust at $57.33 billion, with total assets under management (AUM) standing at $152.45 billion.

Ethereum ETFs Face Persistent Pressure

The situation for Ethereum ETFs is more concerning. On September 17, Ether products saw another $1.89 million in net outflows, continuing a bleed that began in early September. Fidelity’s FETH was the largest loser with $29.19 million in redemptions.

While inflows into BlackRock’s ETHA and Grayscale’s products provided some relief, they failed to reverse the negative trend. This follows a period of heavy selling earlier in the month when Ether ETFs lost over $1 billion in six sessions. The persistent withdrawals have raised questions about institutional conviction in Ethereum compared to the more resilient Bitcoin market.

SEC Paves the Way for a New Wave of Crypto ETFs

While short-term fund flows showed volatility, major regulatory news has painted a highly optimistic long-term picture. The U.S. Securities and Exchange Commission (SEC) has approved new listing rules for major exchanges, including Nasdaq, Cboe BZX, and NYSE Arca.

This landmark decision establishes generic listing standards for commodity-based trust shares, effectively creating a streamlined framework for launching spot ETFs tied to a wide range of cryptocurrencies beyond Bitcoin and Ether.

Bloomberg analyst James Seyffart described the move as the “crypto ETP framework we’ve been waiting for,” predicting that spot ETFs for assets like Solana and XRP could be first in line for approval.

The industry is already responding, with five new crypto ETF applications filed this week for assets like Avalanche (AVAX), Bonk (BONK), and Litecoin (LTC). This regulatory clarity is expected to unleash a flood of new, regulated crypto investment products for U.S. investors.

Federal Reserve Rate Cut Adds Fuel to the Market

Adding to the bullish macro environment, the Federal Reserve delivered its first interest rate cut since December, trimming the federal funds rate by 25 basis points to a range of 4.00%–4.25%. The Fed cited a softer economic outlook as the reason for the cut.

Rate cuts are typically bullish for risk assets like cryptocurrencies, as they lower the appeal of holding cash. The market reacted with initial volatility, liquidating over $105 million in crypto positions within an hour, but quickly stabilized. Bitcoin (BTC) held firm above $117,000, while Ethereum (ETH) climbed to $4,568.

Market Analysis: Bitcoin Eyes $118K as Selling Pressure Eases

With positive macro and regulatory tailwinds, traders are now closely watching key technical levels. Bitcoin is currently consolidating and facing a critical resistance level at $118,000. Analysts believe a decisive break above this price could open the door for a retest of its all-time high near $124,000.

Supporting this bullish outlook, on-chain data indicates that selling pressure is easing significantly. Bitcoin exchange inflows have dropped to a yearly low, suggesting that fewer investors are moving their BTC to exchanges to sell. This combination of supportive fundamentals and strong on-chain metrics suggests that despite a temporary pause in ETF inflows, the crypto market’s foundation is stronger than ever.