Hawkish FOMC Meet Triggers Bitcoin Outflows: Investment Products Bleed $621M

A tighter-than-expected FOMC meeting prompted investors to reduce their exposure to fixed-supply assets, which in turn led to digital asset investment products seeing outflows of $600 million.

This represents the largest outflows since March 22, 2024. Furthermore, the recent price decline has exacerbated bearish sentiment, as evidenced by a decline in total assets under management (AuM), which fell from more than $100 billion to $94 billion this week.

Investors are fleeing fixed supply assets

Interestingly, the outflows were entirely focused on Bitcoin, with the cryptocurrency seeing withdrawals worth $621 million, according to the latest edition of CoinShares’ weekly digital asset fund flows. a report. Continued bearish sentiment also led to an influx of $1.8 million in Bitcoin short investment products, reflecting investors’ tendency to bet against rising asset prices.

On the other hand, Ethereum-based investment products recorded inflows worth $13.1 million over the past week. Altcoins also followed suit during the same period. LIDO and XRP also saw $2 million and $1.1 million, respectively, during the same period. Meanwhile, investment products designed for Litecoin and Chainlink attracted $0.8 million each.

Cardano saw inflows of $0.7 million over the past week. On the other hand, Solana saw moderate outflows of $0.2 million.

Despite moderate positive sentiment surrounding altcoin-based investment products, trading volume was low, at $11 billion during the week, compared to a weekly average of $22 billion this year. However, it is important to note that the number is still higher than the $2 billion per week recorded last year.

More broadly, digital asset exchange-traded products (ETPs) have maintained a steady 31% share of global trading volumes on trusted exchanges.

Regional distribution

In addition, the United States bore the brunt of this week’s outflows, recording $165 million. These negative feelings extended to Switzerland, which witnessed foreign inflows worth $23.7 million during the past week. Canada and Sweden also recorded weekly outflows of $15 million each. Hong Kong also observed moderate outflows of $1.3 million.

Germany appears to have bucked the trend with inflows of $17.4 million, followed by Australia with $1.7 million and Brazil with $0.7 million.