Bitcoin ETFs just had their worst day since June as the Fed hiked rates

Crypto markets took it from both ends this week: Congress and the central bank.

The Federal Reserve raised its benchmark interest rate by 25 basis points on Wednesday — a unanimous 12–0 vote lifting the federal funds rate to 3.75%–4.0%. It's the first hike since July 2023, and it came after the Fed left rates unchanged at its first five meetings this year. The FOMC pointed to stubborn inflation driven by higher energy prices, saying the move "will support a timelier return" to its 2% target.

Bitcoin barely flinched — but only because it had already sold off.

Tuesday's bloodbath: $593 million out the door

U.S. spot Bitcoin ETFs shed $450.4 million on Tuesday, their largest single-day outflow since June 24. Fidelity's FBTC led the exodus with $214.8 million pulled out, followed by BlackRock's IBIT at $161.7 million and Grayscale's GBTC at $44.1 million. Ethereum ETFs lost another $142.3 million the same day, while newer XRP funds stayed flat. Combined, the three asset funds lost close to $593 million in a single session — the sharpest one-day pullback crypto ETFs have seen since June, when Bitcoin funds posted their worst month on record.

The trigger wasn't a hack or a crash. It was Congress. The Senate's 49–50 failure to advance the CLARITY Act — the market-structure bill that would have legalized most crypto trading in the U.S. and split oversight between the SEC and CFTC — landed like a shock. Sen. Cynthia Lummis called Tuesday's failure a likely death sentence: "It's over," she said ahead of the vote. Sen. Elizabeth Warren, opposing the bill, had warned it would spark a "crypto-fueled economic crash."

Bitcoin pinned under $76K

Bitcoin traded below $76,000 into Wednesday's Fed decision, near its lowest levels since Aug. 21 after hitting September lows of $74,960 the day prior. Markets saw nearly 93% odds of the Fed hiking — the Kobeissi Letter noted that "whenever expectations of a hike have been this high," the Fed has invariably delivered, and holding steady would have been the biggest dovish surprise since 1994.

The macro backdrop isn't helping risk assets. President Trump has repeatedly demanded rate cuts, but inflation — fueled by oil hitting $106.70 a barrel, its highest since May, amid an expanding war in the Middle East — forced the Fed's hand. With roughly 22 working days left on the Senate calendar and rates heading higher, onchain analytics firm Glassnode flagged $68,000 as bitcoin's next line of support, with a deeper floor at $62,000–$65,000 if the range breaks.

Institutional money had been waiting on regulatory clarity to treat Bitcoin like a normal financial product. This week delivered the opposite.

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