Bitcoin and Ethereum face the fourth quarter, shaped by federal cuts and ETF demand. The market is leaning towards the September policy movement after the weakest monthly employment since 2020, with Crypto’s short-term pathway dependent on how rate expectations lead to spot ETF flows, funding costs and option hedging.
Non-farm salaries rose just 22,000 in August, with unemployment rates reaching 4.3%, according to the Bureau of Labor Statistics.
Futures Markets made the September cut high odds. CME’s FedWatch tool shows the probability of charges embedded in futures for Fed funds, and the broader market is consistent with its setup as recent lows and gold trades dollars near new highs.
The dollar index fell to a seven-week low, with Spot Gold set a record this week, but traders priced September cuts near September with a smaller tail for a bigger move, according to Reuters.
The following policy dates will be revised to the Federal Reserve calendar, with two-day meetings held from September 16-17, followed by October and December sessions. Some banks currently map two quarter cuts in 2025, September and December, a shift following the August labor report.
What does history tell us?
The ETF flows around the previous mitigation window and provides a baseline for what the new cut means. During the week of the cuts in September 2024, US spot Bitcoin ETFs collectively won around $2.4 billion, while Ethereum ETF added around $600 million to its Monday-Friday print.
During Cut Week in December 2024, Bitcoin ETF added about $1.6 billion, while Ethereum Fund was pretty much flat. According to Farside Investor In Bitcoin and Ethereum ETF tables, these episodes share patterns and cluster around decisions in softer days on both sides.
The last 60 days have shown how sensitive these tapes are to macros. In the case of Bitcoin ETFs, it raised the net intake of cumulative US Spot ETFs to about 500 billion people, even though three prints ran out on adjacent days from mid- to late August.
In the case of Ethereum, the late summer burst provided the largest day since its inception, at around $1.02 billion on August 11th, with cumulative net flow now reaching billions of double digits.
These tapes capture two points, flow momentum can quickly flip with macro headings, and when inflows are bundled, prices tend to chase.
Q4 What does reduction in rates mean for Bitcoin?
With that history in hand, three policy paths frame Q4. For example, in a total mitigation path of 75 bps to December, which was reduced by 25 bps at each meeting, the net flow of baseline Bitcoin ETFs of decision numbers could run between $2.2 billion and $2 billion, while Ethereum could run between $300 million and $700 million.
Using simple elasticity, all additional Bitcoin ETF demand, which is concentrated over five days of $500 million, could add 2-3% to the weekly return, and if guidance nods to subsequent cuts, it will be frontloaded into post-mortem sessions.
For example, a 100 bps pass in September, for example, 50 bps followed by another 25 bps cut, or 25 bps in September, historically compressing actual yields faster, creating a sharper risk-on impulse over gold and periods. If it is repeated, the flow band cap becomes more relevant and BTC can see a run of between $700 million and $10 million for several days, rather than isolated spikes.
The 125 bps route is rare, but it is feasible when labor data deteriorates and revisions are heavy, and could coincide with meaningfully weak dollars and easier financial positions.
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In that high-scoring case, there is an additional Bitcoin ETF inflow of approximately $1.5-6 billion when modeling the ETF demand scale into an upper band or via Q4.
Ethereum vs Fed fees
The options listed in Ethereum ETF are important as dealers can systematically hedge the options. The NYSE American SEC’s April 9 approval order followed options for similar filings in April with the Bitwise Ethereum ETF, Grayscale Ethereum Trust, Grayscale Ethereum Mini Trust and CBOE.
If the optional volume is robust, the dealer’s gamma can keep the daytime range close to mass strikes.
A practical sensitivity is a reduction in impact during low capacity periods with plus or minus 1-2 percentage points around basic elasticity during heavy options.
Macrocross currents can stretch or compress these ranges. The $100 billion weekly bill sales highlight a shift towards very short-term Treasury funding. This lowers the curved front end when the cut arrives.
Calendar cadence is also important, with the September meeting setting forth progress guidance to shape the end of the year. Market implemented passes for year-end policy via the Atlanta Federal Government’s Market Probability Tracker distribute meaningful weights into multiple 2025-2026 cuts.
Conversely, if inflation data re-accelerates, or if revisions reduce lean labor, the flow band will compress towards the bottom edge, and elasticity will decrease as periods and dollars stabilize.
Bitcoin and Ethereum response to speed reductions by numbers
To put numbers on price targets, you need to convert the flow band and rate path into return ranges.
For Bitcoin, if the September and December decision weeks provide net profits of between $15 billion and $2.5 billion based on a total mitigation path of 75-100 bps, respectively, then a cumulative impulse of 4-7% from flow alone is reasonable over these weeks, and is expanded by funding, basis, and dollar pathways.
Heavyer weeks, for example, 100-125 bps pass with a concentration of $2.5 billion to $4 billion, flow link contributions move to high single digits. For Ethereum, the same logic applies on less dollar scales, but option hedges can smooth or emphasize movements that are close to expiration dates.
| Pass (Total BPS by December) | Modeled decision week | BTC ETF Netflow (Q4, $B) | ETH ETF Netflow (Q4, $B) | Return effect from BTC flow (%) | Return effect from ETH flow (%) |
|---|---|---|---|---|---|
| 75 | 2 | 0.8 to 3.2 | 0.2 to 0.8 | 1.6-9.6 | 0.6-4.0 |
| 100 | 3 | 1.2 to 4.8 | 0.3 to 1.2 | 2.4-14.4 | 0.9-6.0 |
| 125 | 3 (Upper band) | 1.5-6.0 | 0.4-1.6 | 3.0-18.0 | 1.2-8.0 |
The setup is data dependent and needs to be updated in real time, but the scaffolding is stable, pairing FedWatch odds with Bitcoin and Ethereum ETF flows and mapping decision weeks using the FOMC calendar.
For the macro context of risk appetite, we track dollar and gold trends and use the market probability tracker to cross-check implicit policy paths.
