BTC, ETH Surge to 3-Week Highs Amid ETF Inflows

Cryptocurrency Market Surges After US Federal Reserve Cuts Interest Rates

The cryptocurrency market witnessed a significant revival after the United States Federal Reserve announced an interest rate cut on Wednesday, marking the first reduction in nearly four years. This decision ignited a surge in the two largest digital assets, Bitcoin (BTC) and Ethereum (ETH), both of which saw price jumps of roughly 10% in the following days.

BTC Price Rises Amid ETF Inflows

Bitcoin’s price saw substantial growth as 11 spot Bitcoin ETFs continued to attract investor attention. Since their launch in January, these ETFs have experienced both positive and negative net flows, directly impacting BTC’s price. In fact, Bitcoin reached a new all-time high just two months after these ETFs became available.

Investor sentiment often shifts in response to macroeconomic events, and the Federal Reserve’s FOMC meeting on Wednesday was no exception. With this being the first interest rate cut in the U.S. since 2020, and the first since the Bitcoin ETFs’ inception, many were watching how the market would respond.

• In the days leading up to the FOMC meeting, U.S. investors poured over $500 million in net inflows into Bitcoin ETFs.
• On the day of the meeting, investors withdrew $52.7 million.
• By the following day, net inflows totaled $158.3 million.

Among the Bitcoin ETFs, Ark Invest’s ARKB led the way with $81.1 million in net inflows, followed by Fidelity’s FBTC, which attracted nearly $50 million. Notably, there were no significant outflows reported, though BlackRock’s IBIT saw no trading activity.

At the same time, BTC’s price soared from $59,000 on the day of the rate cut to just over $64,000 before a slight correction to $63,400.

Ethereum ETFs Also See Inflows

Ethereum ETFs have struggled to generate the same interest as their Bitcoin counterparts. Since launching in late July, they have experienced few days with positive net inflows.

• On Monday before the FOMC meeting, investors withdrew $9.4 million from Ethereum ETFs.
• Tuesday saw further outflows of $15.1 million.
• Another $9.8 million was withdrawn on Wednesday, the day of the rate cut.

However, the tide began to turn on Thursday, with total net inflows of $5.2 million recorded. Interestingly, all of these inflows went into BlackRock’s ETHA, while other Ethereum ETFs saw no significant activity.

ETH’s price mirrored BTC’s rise, jumping from $2,300 during the FOMC meeting to nearly $2,575, marking a 12% surge and its highest level since late August.