Digital asset investment products faced significant outflows last week, totaling $305 million, as reduced expectations for a U.S. interest rate cut, following stronger economic data, dampened market sentiment.
According to CoinShares, this decline reflects a broader negative trend affecting various providers and regions within the crypto market.
In a blog post dated September 2, James Butterfill, Head of Research at CoinShares, attributed the recent outflows to stronger-than-expected U.S. economic data, which has diminished the probability of a 50-basis point interest rate cut by the Federal Reserve.
Butterfill noted,
“We continue to expect the asset class to become increasingly sensitive to interest rate expectations as the FED gets closer to a pivot.”
The report highlighted that the U.S. experienced the largest outflows, with $318 million withdrawn. Germany and Sweden also saw outflows of $7.3 million and $4.3 million, respectively. In contrast, Switzerland and Canada recorded modest inflows of $5.5 million and $13 million.
Bitcoin was the hardest hit, with nearly $320 million in outflows. Despite this, short Bitcoin investment products saw their highest inflows since March, receiving $4.4 million for the second week in a row. Ethereum experienced $5.7 million in outflows, with trading volumes remaining at just 15% of those during the U.S. ETF launch week. Conversely, Solana saw $7.6 million in inflows, bucking the trend. Additionally, blockchain equities gained positive momentum, attracting $11 million, particularly into investment products focused on Bitcoin miners.
Notably, over the past five weeks, there has been a general decline in the inflow of funds into crypto investment products. According to CoinShares, two weeks ago, these products received a total of $530 million in inflows, with the U.S. leading in this regard with $498 million. Specifically, Bitcoin attracted the largest inflow at $543 million, while Ethereum experienced outflows of $36 million. Additionally, Ethereum ETFs saw a total of $3.1 billion in inflows over the past month.
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