Wintermute: Bitcoin ETF Fund Flows Turn Negative, Market Leans Neutral Ahead of Rate Hike

BlockBeats news, September 15 — Wintermute OTC Desk released a market update on September 14, stating that BTC ETFs saw a net outflow of $463 million last week, the first weekly net outflow since June; over the same period, BTC fell 4.4%, making it the worst-performing asset in its tracked universe, while altcoins rose 1.0% overall. Wintermute said that with ETF flows turning negative and expectations for a Fed rate hike having risen sharply, the short-term view on the crypto market should shift from mildly positive to neutral.

On the crypto market side, Bitcoin ETFs recorded a cumulative net outflow of $463 million last week, with ARK and Grayscale contributing about $371 million combined, while BlackRock's flows were roughly flat; ETH ETFs saw a full-week net inflow of $197 million, but this was mainly driven by a single-day inflow of $216.4 million after Friday's CPI release, with net outflows from Tuesday through Thursday. Wintermute believes that the ETF buying that drove BTC from $63,000 to $82,000 over the past three weeks was absent this week, and BTC consequently pulled back by about $3,500.

Wintermute also noted that Robinhood Chain's on-chain revenue has cooled markedly recently. The chain's revenue fell from a peak of $6 million on September 4 to $485,000 on Sunday, a 69% drop in a single week; over the same period, DEX trading volume was roughly flat at $14 billion, while TVL rose to $930 million. PONS launchpad trading volume fell 17%, as the early-September token creation boom gradually faded; on the other hand, Uniswap trading volume on Robinhood Chain rose 28%, but this mainly came from fewer, larger tokenized stock trades. Revenue per unit of trading volume on Robinhood Chain fell 85% in nine days, and the gas subsidies that fueled the September surge in trading activity will expire at the end of this month. Wintermute believes that the on-chain revenue currently corresponding to the relevant tokens has already fallen 69% before the subsidies end, and further pressure still lies ahead.

As for the outlook, Wintermute said that with BTC ETF flows turning negative again, its view has shifted from previously mildly positive to neutral. One of the logics behind the crypto market's rise over the past period was that funds flowed out of the highly valued stock market and into BTC via ETFs; but this week the flow direction reversed, and BTC's decline even exceeded that of the stock assets it was previously thought to be drawing funds away from. Therefore, Wintermute believes this does not mean the earlier logic has completely failed, but it at least weakens the case for maintaining a bullish position before the Fed rate hike. With ETF buying absent, BTC is currently in the $76,000 to $82,000 range, and the marginal buyer is not obvious.

Wintermute believes there are two key events worth watching this week. The first is the U.S. Senate's procedural vote on Tuesday to open debate on the CLARITY Act, which requires 60 votes, while Republicans currently hold 53 seats; if the procedural vote passes, it could drive the market to an upside surprise, while if it fails, the market may have already priced in the related impact. The second is the Federal Reserve's interest rate decision on Wednesday, with the market expecting a 25 basis point hike to 3.75% to 4.00%, the first rate hike in three years. In this regard, Wintermute believes that the rate hike itself has already been priced in by the market, but Fed Chair Warsh's hawkish remarks on subsequent policy have not yet been fully priced in, especially signals regarding consecutive rate hikes in the first quarter of 2027, which could become a factor driving the crypto market further weaker.