Crypto investment products lost $726 million last week amid fee cut uncertainty

According to data from CoinShares, crypto investment products are experiencing a noticeable shift in investor sentiment. In the last week of trading, they recorded a staggering net outflow of $726 million, the highest outflow since March 2024.

Bitcoin (BTC) saw the biggest outflow of the week, totaling $643 million, while short bitcoin saw smaller inflows of $3.9 million. This includes a negative flow of $706 million seen by the 12 local US Bitcoin ETFs last week.

Tickets continue to dry up

On the other hand, Ethereum experienced minor outflows of $98 million last week, driven mainly by the Grayscale Trust, while newly issued ETF inflows continue to dry up.

However, Solana posted the largest weekly inflows for any asset, totaling $6.2 million.

From a regional perspective, the United States recorded the largest outflows, totaling $721 million, followed by Canada, which recorded smaller negative flows of $28 million. In contrast, Germany and Switzerland recorded positive flows of $16.3 million and $3.2 million, respectively. This underlines the positive sentiments of investors in European countries.

Uncertainty of the rate cut

Analysts at CoinShares have attributed the negative flows seen in crypto investment products to uncertainty surrounding the Fed’s rate cut next week.

“We believe this negative sentiment was driven by stronger-than-expected macroeconomic data from the previous week, which increased the likelihood of a 25 basis point (bp) interest rate cut by the Reserve US Federal,” James Butterfill, Head of Research at CoinShares. he said in the report.

The analyst, however, noted that there was a slowdown in daily output at the end of the week as recently released US employment data fell below expectations, leaving market views of a possible “heavily split” 50 bp type cut.

“Markets are awaiting Tuesday’s Consumer Price Index (CPI) inflation report, with a 50bp cut more likely if inflation is below expectations,” he added .

At the time of filing this report, bitcoin was trading at 55,696, representing an increase of 2.46% in the last 24 hours. Ether (ETH), on the other hand, is trading at $2,314, up less than 2% on the day.

SPECIAL OFFER (Sponsored) Binance Free $600 (Exclusive to CryptoPotato): Use this link to register a new account and receive an exclusive welcome offer of $600 to Binance (full details).

2024 LIMITED OFFER on BYDFi Exchange – Up to $2888 Welcome Reward, Use this link to register and open a 100 USDT-M position for free!