
Bitcoin & Ether ETFs Rally as Powell Hints at Rate Cuts
The pendulum of investor sentiment has swung once again. After weeks of turbulence and heavy outflows, U.S. spot Bitcoin and Ether exchange-traded funds have turned sharply upward, buoyed by one of the most powerful forces in finance: a change in tone from the Federal Reserve.
On Tuesday, the market’s pulse quickened as Chair Jerome Powell signaled that the Fed may soon pivot from restraint to stimulus. His carefully measured remarks — hinting at an end to quantitative tightening and foreshadowing rate cuts — rippled instantly across global markets. In the crypto sphere, the response was electric.
A Reversal in Flow
Just 24 hours earlier, the mood had been grim. Bitcoin ETFs had seen an exodus exceeding $326 million, their worst outflow since early summer. Yet by Tuesday, the tide had reversed dramatically: more than $102 million in new capital poured in, with Fidelity’s Wise Origin Bitcoin Fund leading the charge at $132.6 million in net inflows.
BlackRock’s iShares Bitcoin Trust, the industry’s heavyweight, recorded a smaller outflow of around $31 million, but across the sector, the pattern was unmistakable — investors were repositioning, anticipating the return of liquidity. The total assets now managed by Bitcoin ETFs stand at approximately $153.5 billion, accounting for nearly 7 percent of Bitcoin’s entire market capitalization.
Ether funds, which had endured their own bruising sell-off, echoed that recovery. After shedding $428 million on Monday, the group attracted $236 million in fresh inflows the next day. Fidelity again led with $154 million, while Grayscale and Bitwise posted double-digit rebounds.
The Powell Effect
Markets listen for subtleties — tone, pause, emphasis — and Powell’s latest comments delivered them all. He acknowledged that the Fed’s balance sheet had shrunk substantially and that reserves were now “somewhat above” the level consistent with ample liquidity. For those reading between the lines, that phrase carried weight: it hinted that the era of monetary tightening may be nearing its end.
More importantly, Powell cited signs of a softening labor market as a reason to consider easing policy. In the logic of Wall Street, weaker jobs data translate into gentler monetary conditions. And gentler conditions feed risk appetite — from equities to crypto.
Capital Returns to the Risk Frontier
Lower interest rates reshape the calculus of risk. When yields on government bonds decline, investors look elsewhere for return. Bitcoin, Ether, and their respective ETFs become natural destinations for this wandering capital — volatile, yes, but uncorrelated and often quick to reprice optimism.
This dynamic is already visible. In the span of a week, crypto investment products collectively gained $3.17 billion in net inflows. Even the violent sell-off that liquidated tens of billions across exchanges last Friday failed to crush institutional interest. The resilience is striking: crypto is no longer a speculative corner, but a recognized segment of the financial conversation.
A Fragile Optimism
Still, the new momentum remains delicate. Powell’s hints are not guarantees; a single inflation surprise could dissolve this rally overnight. Traders know this well — they are surfing a wave that depends not only on policy but on perception.
Should rate cuts materialize, ETFs tied to Bitcoin and Ether may enter a new growth phase. But if the Fed backpedals, or if macro data regain heat, those inflows could evaporate as quickly as they appeared.
The broader story is less about a single week of gains and more about transformation. Crypto markets, once dismissed as detached from traditional finance, now move in lockstep with the world’s most powerful central bank. The Fed whispers — and Bitcoin listens.
For now, that whisper has turned into wind at its back.
Source: Cointelegraph — “US Bitcoin and Ether ETFs Rebound as Powell Signals Rate Cuts” (October 2025)
Written by Brian Leclere