Bitcoin ETF Outflows Signal Market Shift After Fed Hawkish Stance - Crypto Investors React

Spot Bitcoin ETFs experienced their first daily outflows in over a week, with net withdrawals reaching $51.28 million on Wednesday. This reversal ended a seven-day inflow streak that had brought nearly $3 billion into these funds. The shift occurred as investors responded to the Federal Reserve's unexpectedly cautious monetary policy outlook. Despite the outflows, total assets under management remain robust at over $150 billion according to SoSoValue data. The market sentiment changed significantly after Fed Chair Jerome Powell emphasized ongoing economic uncertainty and projected fewer rate cuts than market participants had anticipated. While the Fed implemented a expected 25 basis point rate reduction, bringing the benchmark to 4.00%-4.25%, the real market surprise came from the updated projections. The central bank now anticipates only two additional cuts in 2025 and fewer in 2026 than previously expected. Powell's cautious press conference highlighted "elevated" inflation concerns and growing "downside risks" to employment, creating a hawkish tone that made traders more risk-averse. Ethereum ETFs also continued their outflow trend with $1.89 million in net redemptions, marking two consecutive days of withdrawals. Despite the ETF outflows, cryptocurrency prices showed resilience with Bitcoin gaining 0.3% and Ethereum rising 1.7% over 24 hours, while the CoinDesk 20 index advanced 2%.