After several days of heavy outflows, U.S. Bitcoin and Ethereum ETFs saw renewed investor interest on Tuesday, fueled by growing expectations that the Federal Reserve will begin cutting interest rates before the end of the year.
The shift in sentiment followed comments from Fed Chair Jerome Powell suggesting that monetary tightening may soon end, sparking optimism across both traditional and crypto markets.
Data from Farside Investors shows that spot Bitcoin funds pulled in over $100 million in new capital, reversing the previous day’s steep withdrawals. Fidelity’s Wise Origin Bitcoin Fund led the recovery with more than $130 million in inflows, while BlackRock’s IBIT saw minor redemptions. Altogether, Bitcoin ETFs now hold roughly $153 billion in assets — accounting for almost 7% of Bitcoin’s total market capitalization.
Ethereum products mirrored the rebound. Spot Ether ETFs attracted roughly $236 million in inflows after a sharp pullback the day before. Fidelity once again dominated with more than half of that total, followed by Grayscale and Bitwise. The turnaround indicates that institutional appetite for crypto exposure remains intact, despite last week’s volatility.
Powell’s speech at the National Association for Business Economics conference was the clear catalyst. The Fed chief said the central bank is nearing the end of its balance sheet runoff and hinted at upcoming rate cuts as the labor market softens. That message was enough to reignite the “risk-on” narrative that has historically benefited crypto assets.
“Markets are already preparing for an October rate cut,” said Vincent Liu, CIO at Kronos Research. “If that happens, capital will flow back into assets like Bitcoin and Ethereum where liquidity and volatility can work in investors’ favor.”
The renewed inflows come just days after one of the largest market shakeups of the year, when U.S.-China tariff tensions triggered a $20 billion liquidation cascade. Yet, despite the selloff, CoinShares data shows digital asset products still drew $3.17 billion in inflows last week, pushing 2025’s total to nearly $49 billion — already higher than all of last year.
With macro headwinds easing and ETF activity strengthening, analysts suggest the final quarter could see a resurgence in institutional demand. If Powell’s policy shift becomes official, crypto ETFs may once again serve as a key vehicle for capital rotation into Bitcoin and Ethereum — just as markets gear up for a potential year-end rally.
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Alex is an experienced financial journalist and cryptocurrency enthusiast. With over 8 years of experience covering the crypto, blockchain, and fintech industries, he is well-versed in the complex and ever-evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His approach allows him to break down complex ideas into accessible and in-depth content. Follow his publications to stay up to date with the most important trends and topics.
Source: https://coindoo.com/bitcoin-and-ethereum-etfs-recover-strongly-as-rate-cut-hopes-rise/