Global cryptocurrency investment products faced significant outflows last week, totaling $305 million, according to the latest report from CoinShares. This marks a sharp reversal from the previous week, which saw net inflows of $543 million. The outflows were observed across major asset managers, including Ark Invest, Bitwise, BlackRock, Fidelity, Grayscale, ProShares, and 21Shares.
James Butterfill, CoinShares’ Head of Research, attributed the outflows to “widespread negative sentiment evident across various providers and regions.” This sentiment was primarily driven by stronger-than-expected economic data in the U.S., which reduced the likelihood of a significant interest rate cut by the Federal Reserve. “We continue to expect the asset class to become increasingly sensitive to interest rate expectations as the Fed gets closer to a pivot,” Butterfill noted.
Bitcoin Bears the Brunt of Negative Sentiment
The negative sentiment was most pronounced in bitcoin-related investment products, which saw $319 million in net outflows last week. In contrast, short bitcoin funds recorded $4.4 million in net inflows, marking the largest inflows since March. The U.S. spot Bitcoin exchange-traded funds (ETFs) were particularly hard-hit, with $277.2 million in outflows last week, leading to a monthly negative flow of $94.2 million for the first time since April. This stands in stark contrast to the $3.2 billion in net inflows recorded in July.
Ethereum investment products also experienced outflows, with $5.7 million in net losses last week. Trading volumes for Ethereum investment products dropped to just 15% of the levels seen during the U.S. spot ETF launch week in late July, signaling waning interest.
U.S. spot Ethereum ETFs were similarly affected, with $12.4 million in outflows last week and no activity on Friday, indicating dwindling investor interest.
Solana and Blockchain Equities Buck the Trend
Despite the overall negative trend, Solana-based funds bucked the market, attracting $7.6 million in net inflows last week. Blockchain equities, particularly those focused on bitcoin mining, also saw net inflows of $11 million, according to CoinShares.
The report underscores the growing sensitivity of the crypto market to macroeconomic factors, particularly interest rate expectations, as investors navigate an increasingly volatile landscape.
