Widespread negative crypto sentiment ‘evident’ across regions, CoinShares says

Digital asset investment products saw millions of dollars in outflows last week as expectations for a rate cut waned following strong economic data in the United States.

The cryptocurrency market appears to be under the influence of widespread negative sentiment “across multiple providers and regions,” as digital asset investment products saw a total of $305 million in outflows last week, according to CoinShares.

The outflows appear to be driven by stronger-than-expected economic data in the U.S., which has reduced the likelihood of a 50 basis point Fed rate cut, CoinShares Head of Research James Butterfill said in a Sept. 2 blog post.

“We continue to expect the asset class to become increasingly sensitive to interest rate expectations as the Fed approaches a pivot point.”

James Butterfill, head of research at CoinShares

The data shows that the US led the outflows with $318 million withdrawals, while Germany and Sweden saw outflows of $7.3 million and $4.3 million respectively. In comparison, Switzerland and Canada recorded smaller inflows of $5.5 million and $13 million.

Weekly crypto asset flows | Source: CoinShares

Bitcoin (BTC) bore the brunt of the outflows, losing around $320 million. However, short Bitcoin investment products saw their biggest inflows since March, pulling in $4.4 million for the second week in a row. Ethereum (ETH) also saw outflows of $5.7 million, with trading volumes stagnating at just 15% of levels seen during the US ETF launch week.

Solana (SOL) defied the trend, attracting $7.6 million in inflows. Blockchain stocks are also gaining positive momentum, with $11 million in inflows into investment products specifically focused on Bitcoin miners, Butterfill said.

As Crypto.news previously reported, Bitcoin fell almost 10% in August, while the Nasdaq 100 index rose more than 2% and gold reached an all-time high of $2,530. The performance came despite the US dollar index falling more than 6% from its highest point this year to $100.1. Analysts at French blockchain firm Kaiko suggested that the sell-off was likely due to investors’ concerns about falling liquidity in the Bitcoin market and growing concerns that governments would start selling their assets.