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Bitcoin, Ether ETFs Lose $520M as XRP Bucks Fed Rate-Hike Selloff
On Wednesday, U.S. bitcoin and ether exchange-traded funds (ETFs), which are investment funds that track these cryptocurrencies, lost a combined $520 million after the Federal Reserve raised interest rates for the first time since 2023.
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What happened
On Wednesday, U.S. bitcoin and ether exchange-traded funds (ETFs), which are investment funds that track these cryptocurrencies, lost a combined $520 million after the Federal Reserve raised interest rates for the first time since 2023.
Confirmed
Global impact / market context
Higher interest rates make borrowing money more expensive, pushing investors toward safer assets and away from risky ones like bitcoin and ether. This reduces demand for crypto ETFs, potentially lowering their prices and affecting investors who hold them.
Analyst inference
Crypto markets often react to Federal Reserve policy because higher rates reduce the appeal of risky investments. While bitcoin and ether ETFs saw big withdrawals, XRP, solana, and HYPE funds attracted modest new money, showing some investors still seek opportunities in alternative digital assets.
Analyst inference
What to watch
- Watch for further daily flow reports on bitcoin and ether ETFs, as Wednesday's $520 million loss may signal continued investor caution if the Federal Reserve pursues more rate increases. Confirmed
- Consider monitoring whether XRP, solana, and HYPE funds maintain their inflows, as their resistance to the selloff could indicate shifting investor preference toward alternative cryptocurrencies. Proposed
- Expect increased volatility in crypto ETF prices if inflation data remains elevated, since the Federal Reserve may raise rates again, which would likely intensify selling pressure on bitcoin and ether funds. Analyst inference
Affected assets
- SOL — Solana
- XRP — XRP
- HYPE — Hyperliquid
- BTC — Bitcoin
- ETH — Ethereum