Global Crypto Investment Products Face $726 Million in Outflows: Largest Weekly Drop Since March

Global Crypto Investment Products See Largest Weekly Outflows Since March, Totaling $726 Million

Global crypto investment products experienced substantial net outflows last week, amounting to $726 million, according to CoinShares. This figure matches the largest recorded outflows observed in March, reflecting ongoing uncertainties surrounding potential rate cuts by the U.S. Federal Reserve.

Impact of U.S. Macroeconomic Data

CoinShares Head of Research, James Butterfill, attributed the significant outflows to stronger-than-expected macroeconomic data from the previous week, which increased speculation about a potential 25 basis point interest rate cut by the Federal Reserve. However, as employment data fell short of expectations later in the week, the outlook on a possible 50 basis point cut became more divided. Markets are now closely watching Tuesday’s Consumer Price Index (CPI) inflation report, with a 50 basis point cut becoming more likely if inflation figures come in below expectations.

Regional Market Trends

The outflows last week were predominantly driven by the U.S. market, which recorded $721 million in net outflows. This includes $706.1 million in outflows from U.S. spot Bitcoin exchange-traded funds (ETFs), marking an eight-day negative streak that has accumulated nearly $1.2 billion. In contrast, Canadian crypto investment products saw net outflows of $28 million, while European markets demonstrated resilience. Germany and Switzerland experienced positive sentiment with net inflows of $16.3 million and $3.2 million, respectively.

Bitcoin and Ethereum Fund Performance

Bitcoin funds led the outflows with a net withdrawal of $643 million for the week. Short-bitcoin products, however, saw minor net inflows of $3.9 million. Ethereum-based investment products also faced net outflows totaling $98 million, primarily driven by Grayscale’s ETHE fund, which saw $111 million in outflows. Other spot Ethereum ETFs experienced minimal inflows.

Solana Funds Show Positive Trend

In a notable exception to the overall trend, Solana-based funds recorded the largest net inflows of any digital asset investment product, adding $6.2 million last week. This marks the second consecutive week of positive performance for Solana funds, highlighting a shift in investor sentiment.

FAQ: Global Crypto Investment Products Record Largest Weekly Outflows Since March