Spot Bitcoin ETFs Experience $462 Million in Outflows Amid Fed Rate Hike Speculation

US spot Bitcoin ETFs had a challenging week, with net outflows reaching around $462.7 million between September 8 and 11. This downturn is particularly striking as it follows a week where nearly $987 million flowed into these funds, including a substantial single-day inflow of about $730.9 million on September 3.

The outflows were largely attributed to growing concerns regarding an anticipated 25-basis-point rate hike by the Federal Reserve at the upcoming FOMC meeting on September 16. This speculation has prompted institutional investors to withdraw from riskier assets, including Bitcoin.

September 10 marked the peak of the outflows, with $282.6 million exiting spot Bitcoin ETFs in a single day. ARK 21Shares’ ARKB was hit hardest, accounting for approximately $164.3 million of that total. Other notable products experiencing redemptions included Grayscale’s GBTC, BlackRock’s IBIT, and Fidelity’s FBTC.

As a result of these outflows, Bitcoin's price also saw a decline, dropping from around $77,362 to approximately $76,816 during the same period.

Despite this week's significant outflows, the overall picture for spot Bitcoin ETFs remains robust, with cumulative net inflows since their launch in January 2024 surpassing $55 billion. Total assets under management across these funds vary between $97 billion and $148 billion, indicating that the recent outflows, while notable, represent less than 1% of total AUM even on the conservative end of estimates.

New Insights on Bitcoin Open Interest

Bitcoin's open interest has seen a significant decline of approximately 14% as traders shift towards spot trading, reflecting a broader trend of deleveraging in the derivatives market throughout 2026.

This decrease in open interest (OI) has been characterized by orderly unwinds rather than panic-driven liquidations, with OI contractions ranging from 11% to 19.5% in various episodes.

A notable drop occurred on September 12, when Bitcoin futures OI fell by around 13,600 BTC in just 24 hours, amounting to approximately $1.05 billion in notional value.

Earlier in the year, OI decreased from about 381,000 BTC to 314,000 BTC, marking a nearly 17.5% drop following all-time high corrections.

Binance currently holds about 36% to 37% of total Bitcoin open interest, indicating its importance in gauging the derivatives market's sentiment.

These OI contractions suggest a conscious market shift towards spot trading, as reduced leverage minimizes the risk of forced liquidations during price fluctuations.

The pattern of deleveraging before key economic events, followed by re-leveraging, has been observed multiple times this year, particularly around macroeconomic data releases and Federal Reserve decisions.

Latest Developments on Bitcoin ETFs

• US spot Bitcoin ETFs experienced $462.7 million in outflows over a holiday-shortened week, marking their first weekly loss since mid-August.
• Withdrawals occurred across all four trading sessions, with the largest outflow of $282.6 million on Thursday.
• Prior to this downturn, investors had injected approximately $3.8 billion into Bitcoin ETFs during a three-week period as Bitcoin briefly surpassed $80,000.
• The Federal Open Market Committee is set to meet on September 15-16, with expectations of potential interest rate hikes due to rising inflation and Treasury yields.
• Bitcoin's price fluctuated between $76,000 and $79,800 last week, with $75,000 emerging as a critical support level.
• Despite the recent outflows, analysts caution that it is too early to determine if this marks a significant shift in ETF demand.

New Insights on Fed Rate Hike Speculation

The Federal Reserve's upcoming September FOMC meeting has generated significant debate among market participants. Current market pricing indicates a strong expectation of a 25 basis point rate hike, with predictions rising from 49% to 80.5% over the past week.

Despite this, a majority of economists forecast that the Fed may choose to maintain current rates, introducing uncertainty into the market. The last decision left the target range unchanged at 3.50%–3.75% following a 9–3 vote in July.

Key indicators such as inflation data, unemployment figures, and consumer spending trends will be crucial in influencing the Fed's decision. Additionally, statements from Fed Chair Jerome Powell and other FOMC members are anticipated for further clarity.

New Developments in Bitcoin Treasury Management

KULR Technology Group has sold its remaining 764 Bitcoin, marking a complete exit from its Bitcoin treasury strategy initiated in August. The sales, conducted between August 20 and September 11, generated approximately $58.6 million in gross proceeds at an average price of about $76,633 per Bitcoin.

This decision follows a series of earlier transactions where KULR sold about 333 Bitcoin for around $21.5 million, primarily to repay debt owed to Coinbase. The company has now eliminated its Bitcoin holdings entirely, shifting focus back to its core energy business.

The recent sale enhances KULR's liquidity, although the future allocation of these funds remains unspecified. The company has not ruled out the possibility of future Bitcoin purchases, leaving open the question of how it will utilize the proceeds to generate returns from its energy operations.

New Insights on Bitcoin Futures

As of September 8, leveraged funds increased their net short positions in Bitcoin futures by 1,668 BTC, bringing their total net short to 39,876 BTC.

The increase in short positions was largely driven by CME’s five-BTC contracts, where leveraged funds added 888 short contracts and 616 long contracts, resulting in a net short increase of 272 contracts (1,360 BTC).

Short exposure across four regulated Bitcoin futures markets rose by 4,965 BTC, while long exposure increased by 3,296 BTC, indicating a complex positioning strategy rather than a simple bearish outlook.

The data suggests that these adjustments were made ahead of the Federal Open Market Committee (FOMC) meeting scheduled for September 15-16, reflecting potential market anticipations regarding Fed decisions.