Bitcoin ETFs See Largest Outflow in Six Weeks: What's Going On?

U.S. spot Bitcoin (CRYPTO: BTC) ETFs recorded their largest weekly outflow since late June, even as Goldman Sachs (NYSE:GS) calls a September Fed rate hike “very unlikely.”

What The ETF Numbers Show

The 13 U.S.-listed Bitcoin ETFs saw $389.7 million drained in the week of Aug. 10, reversing the $853.5 million they pulled in the prior week according to SoSoValue data. 

The last time outflows were larger was the week ending July 2, when funds shed $526.64 million.

The outflows followed a major cold wallet hack that renewed investor interest in holding Bitcoin through regulated vehicles rather than self-custody, though that dynamic did not translate into inflows last week.

Why Goldman Calling A September Hike ‘Very Unlikely’ Matters

Goldman Sachs Chief Economist Jan Hatzius told clients in a note Sunday, cited by Bloomberg, that soft retail sales, slowing employment figures, and easing inflation make a September rate increase very unlikely. 

“We still think market pricing for the funds rate is too hawkish,” Hatzius wrote.

Interest rates directly shape demand for risk assets like Bitcoin. Rate hikes drain liquidity and pressure prices, as seen clearly during the 2022 Fed tightening cycle that sent Bitcoin from $69,000 to $16,000.