Fed cuts of 75 to 100 bps in 2025 could unleash a $6B Bitcoin ETF buying wave soon

Core Viewpoint - Bitcoin and Ethereum are poised for a significant fourth quarter influenced by Federal Reserve interest rate cuts and increased demand for ETFs, with market expectations leaning towards a September policy adjustment following weak job growth data [1][2]. Group 1: Federal Reserve and Economic Indicators - August nonfarm payrolls increased by only 22,000, with the unemployment rate rising to 4.3% [2]. - Futures markets indicate a high probability of a rate cut in September, as reflected in the CME's FedWatch tool, with the dollar trading near recent lows and gold reaching new highs [2][3]. - Historical data shows that during previous easing periods, Bitcoin and Ethereum ETFs experienced significant inflows, suggesting a potential pattern for future cuts [4][5]. Group 2: ETF Flows and Market Reactions - In the week of the September 2024 cut, U.S. spot Bitcoin ETFs saw inflows of approximately $2.4 billion, while Ethereum ETFs added around $600 million [4]. - During the December 2024 cut week, Bitcoin ETFs recorded inflows of about $1.6 billion, indicating a trend of net-positive flows around policy decisions [5]. - Recent data indicates that Bitcoin ETFs had three daily inflows exceeding $800 million in August, contributing to a cumulative net intake of around $50 billion, while Ethereum's cumulative net flows are in the low double-digit billions [6]. Group 3: Future Projections for Q4 - If the Federal Reserve implements a total easing of 75 basis points by December, Bitcoin ETF net flows during decision weeks could range from $1.2 billion to $2.0 billion, with Ethereum's flows estimated between $300 million and $700 million [8].