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

A hawkish-than-expected FOMC meeting drove investors to scale back their exposure to fixed-supply assets, which in turn resulted in digital assets investment products seeing outflows of $600 million.

This represented the largest outflows since March 22, 2024. Moreover, the recent price declines further exacerbated the bearish sentiment, as evidenced in the decrease in total assets under management (AuM), which fell from over $100 billion to $94 billion this week.

Investors Flee Fixed-Supply Assets

Interestingly, the outflows were entirely concentrated on Bitcoin, with the cryptocurrency seeing $621 million in withdrawals, according to the latest edition of CoinShares’ Digital Asset Fund Flows Weekly Report. The ongoing bearish sentiment also prompted inflows of $1.8 million short-bitcoin investment products, reflecting investors’ inclination to bet against the asset’s price rise.

Ethereum-based investment products, on the other hand, recorded inflows of $13.1 million over the past week. Altcoins also followed suit during the same period. LIDO and XRP, too, 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 $0.7 million in inflows over the past week. On the other hand, Solana experienced mild outflows of $0.2 million.

Despite the moderately positive sentiment surrounding investment products based on altcoins, trading volume was low, with $11 billion for the week, as compared to the $22 billion weekly average this year. However, it is important to note that the figure was still higher than the $2 billion a week observed last year.

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

Regional Distribution

Additionally, the US bore the brunt of the outflows for the week, recording $165 million. This negative sentiment extended to Switzerland, which experienced $23.7 million in outflows over the past week. Canada and Sweden also registered weekly outflows of $15 million each. Hong Kong also noted mild 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.