Heavy Bitcoin ETFs Inflows Support Market While Fed Policy Remains Key

Bitcoin ETFs have continued to attract heavy inflows, giving confidence to investors even as the broader crypto market remains cautious.

Source: Sosovalue

Statistics from SoSoValue indicate that:

• U.S. spot Bitcoin ETFs saw $260.02 million in net inflows on the 15th of September, the total inflow being $57.09 billion.

• Total assets under management (AUM) were at $151.72 billion, which is approximately 6.6% of Bitcoin's total market cap.

• Trading volume also remained strong, with $3.03 billion worth traded on the same day.

• During the last week, inflows were more than $2 billion over six trading days.

This reflects increasing institutional demand via vehicles like BlackRock's IBIT.

Fed Policy Holds the Key

Whereas Bitcoin ETFs continue to strengthen, Bitcoin price itself remains range-bound. The coin didn't manage to surge past $116,500 and is now consolidating around $115,000.

Traders are cautious before the next FOMC meeting on September 17 , when the central bank is expected to announce its first rate cut of the year.

For nine months, the Fed has maintained rates steady even as it faced pressure from decelerating job growth, a pickup in unemployment claims, and weakening signals on the U.S. labor market.

With inflation still hovering around 3%, analysts expect a quarter-point cut, which would lower the federal funds rate to between 4.00% and 4.25%.

Why Investors Expect a Rate Cut

Fed Chairman Jerome Powell had earlier signaled that policy decisions would depend on labor market data.

The recent slowdown in hiring and a rise in the unemployment rate to 4.2% has convinced many that the Federal Reserve will prioritize jobs over sticky inflation.

Bond yields have already softened, reflecting expectations of a 25-basis-point cut.

Source: Fed Watch Tool

President Donald Trump, meanwhile, has called for a deeper 50-basis-point reduction, adding political pressure to the Fed’s decision. Markets, however, are mostly priced for a smaller cut.

Analysts See Opportunity for Crypto

Some analysts believe that BTC and Ethereum could be among the biggest beneficiaries of easier monetary policy.

Tom Lee, chairman of BitMine , told CNBC that digital assets have historically shown strong rallies during periods of liquidity easing. He pointed to past Fed pivots in 1998 and 2024, both of which triggered major crypto rallies.

Lee suggested that a “monster move” could follow in the next three months if the Fed confirms a rate cut this week.

Alongside crypto, small-cap stocks and financials are also expected to benefit from the shift.

Bitcoin Faces Short-Term Pressure

In spite of optimism regarding Bitcoin ETFs and Fed policy , short-term headwinds remain for the crypto market.

Source: CoinMarketCap

The digital asset dropped 0.35% to $115,683.02 over the past 24 hours with a trading volume of $49.75 billion. The drop was due to three factors:

• Macro pressures due to U.S.-China tariff tensions and a stronger dollar.

• Technical rejection after it was unable to stay above $118,859.

• Options expiry effect, with $5.6 billion in BTC options expiring on September 15, pulling prices down to the "max pain" level of $117,000.

Conclusion

Bitcoin ETFs are acting as a solid pillar of support for investor confidence, even as macroeconomic uncertainty weighs on prices.

With the Fed meeting around the corner, the market is waiting to see if the expected rate cut will be sufficient to create the motivation for the next big run on BTC and Ethereum.

Should liquidity conditions stabilize, Bitcoin ETFs could become the impetus for another breakout in crypto markets.