Investor enthusiasm for U.S. spot Bitcoin ETFs cooled last week as Federal Reserve Chair Jerome Powell’s recent hawkish tone on rate cuts prompted a more risk-averse approach across markets.
Data from SoSoValue shows Bitcoin ETFs pulled in $603.74 million between May 12–16, marking a sharp 35% drop from the $934 million recorded the previous week. The shift in sentiment followed Powell’s comments that the Fed needs “sustained evidence” of inflation cooling before moving on rate cuts.
Winners and Losers Among Bitcoin ETFs
Despite the slowdown, BlackRock’s IBIT stood out with a hefty $841.7 million in inflows, reaffirming its dominance. In contrast, Grayscale’s BTC and VanEck’s HODL attracted just $39.8 million and $7.3 million, respectively.
Several funds, however, faced significant redemptions. Fidelity’s FBTC posted $122.2 million in outflows, while Grayscale’s GBTC and ARK 21Shares’ ARKB each saw around $70 million in net losses. Bitwise’s BITB and Invesco’s BTCO also recorded modest redemptions, and several ETFs reported no activity at all.
May Still Looks Strong for Bitcoin ETFs
Despite last week’s dip, May’s inflow total stands at $2.64 billion, inching closer to April’s $2.97 billion. Since their January 2024 debut, U.S. spot Bitcoin ETFs have now attracted over $41 billion in net inflows.
Ethereum ETFs Show Resilience
While Bitcoin ETFs lost steam, Ethereum ETFs posted a net inflow of $41.59 million, rebounding from $38.15 million in outflows the previous week. The contrast underscores shifting investor preferences amid broader market uncertainty.
Powell’s Message Hits Market Sentiment
Following a surprise 0.5% drop in April’s Producer Price Index (PPI) — a potential signal of easing inflation — many hoped for a more dovish Fed stance. But Powell emphasized caution, citing global risks like tariffs and supply disruptions, and rising real interest rates. Analysts have now pushed expectations for rate cuts to September or beyond.
Broader Crypto Market Feels the Pressure
The total cryptocurrency market cap has declined 3.3% in the past 24 hours, falling to $3.35 trillion. Bitcoin is trading near $103,000, down 0.7%, while Ethereum saw a sharper decline of 4.8%, dipping below the key $2,400 support level.
Earlier optimism from a temporary U.S.-China tariff rollback agreement faded quickly after Treasury Secretary Scott Bessent warned of a swift reversal if negotiations stall.
According to Ruslan Lienkha, Chief of Markets at YouHodler, last week’s pullback may be part of a broader uptrend correction, but risks remain.
What’s Next?
All attention is now on the upcoming PCE index data release on May 30 — the Fed’s preferred inflation gauge. That report could be pivotal in determining whether Powell maintains his cautious approach or signals a potential shift.
