Bitcoin ETF weekly inflows drop 35% as Fed holds off on cuts

U.S. spot Bitcoin ETFs saw a noticeable slowdown in inflows last week, as investors adopted a risk-off stance following Federal Reserve Chair Jerome Powell’s recent hawkish comments on future rate cuts.

According to data from SoSoValue, Bitcoin ETFs brought in $603.74 million over the past week from May 12-16, which was a little over 35% less than the $934 million they recorded the week before.

Most of last week’s inflows went into BlackRock’s IBIT, which attracted a massive $841.7 million. Meanwhile, funds like Grayscale’s BTC and VanEck’s HODL drew in more modest inflows of $39.8 million and $7.3 million, respectively.

However, not all funds had a good week. Fidelity’s FBTC recorded outflows of $122.2 million, while Grayscale’s GBTC and ARK 21Shares’ ARKB lost around $70 million each. Even Bitwise’s BITB and Invesco’s BTCO recorded modest net redemptions. The other ETFs saw zero flows over the week.

Despite the slower pace last week, May is still looking strong overall. So far, $2.64 billion has flowed into Bitcoin ETFs this month, not far off from April’s $2.97 billion. Since their launch in January 2024, these ETFs have now brought in over $41 billion in net inflows.

Interestingly, Ethereum ETFs had a better week. The nine ETF funds recorded $41.59 million in net inflows, a solid rebound after the $38.15 million in outflows the week before.

Much of the market hesitation can be traced back to Powell’s recent remarks after the April PPI report. While producer prices unexpectedly fell 0.5%, pointing to easing inflation, Powell made it clear that the Fed won’t rush into cutting rates. He stressed the need for “sustained evidence” that inflation is cooling before making any moves.

Powell also highlighted that the economic backdrop has changed, real interest rates are higher, and global risks like tariffs and supply shocks are making inflation less predictable. These concerns have led analysts to push back their expectations for rate cuts, with many now eyeing September or later as the likely window.

Naturally, crypto felt the impact. The total crypto market cap is down 3.3% over the past 24 hours, now sitting at $3.35 trillion. Bitcoin (BTC) is hovering around $103,000, down 0.7%, while Ethereum (ETH) took a heavier hit, dropping 4.8% to under $2,400, a key support level.

Earlier last week, sentiment had briefly turned bullish after the U.S. and China agreed to roll back tariffs for 90 days, a move seen as positive for global markets. But the optimism was short-lived. Treasury Secretary Scott Bessent warned that the U.S. could quickly reimpose those tariffs if talks go sideways.

Commenting on last week’s pullback, Ruslan Lienkha, Chief of Markets at YouHodler, told crypto.news that it was part of a natural correction within an ongoing uptrend but warned of potential risks.

“The upward momentum in equity markets has moderated following the conclusion of tariff negotiations, as short-term traders began locking in profits, triggering corrective movements. This shift in sentiment has spilled over into riskier assets, including Bitcoin. As a result, the current pullback appears to be a correction within a broader medium-term uptrend. However, ongoing global economic uncertainty and persistently high interest rates in the U.S. may act as headwinds, potentially capping the upside potential of this trend.”

Ruslan Lienkha, chief of markets at YouHodler

Looking ahead, all eyes are on the May 30 release of the PCE index, the Fed’s preferred inflation gauge. That data could be key in determining whether Powell stays the course or finally pivots.