Crypto Funds Halt 15-Week Inflow Streak: $223M Outflows
Crypto Funds Experience $223M Outflows, Ending 15-Week Inflow Streak
Cryptocurrency investment products saw a reversal of fortune last week, with $223 million in outflows, according to CoinShares data. This ends a 15-week run of consecutive inflows, triggered by investor reaction to hawkish signals from the Federal Open Market Committee (FOMC) meeting.
Despite a strong start to the week, the trend shifted following the FOMC meeting and better-than-expected U.S. economic data. CoinShares suggests this might be minor profit-taking after substantial inflows in the past month, stating that recent inflows represent 50% of the year's total.
Federal Reserve Chair Jerome Powell's remarks also tempered expectations for a September interest rate cut, dropping the probability from 63% to 40%.
Adding to the negative sentiment, August is historically a poor month for Bitcoin (BTC). CoinGlass data indicates a median return of -7.49% for Bitcoin in August.
Bitcoin Hit Hardest, Ether Defies the Trend
Bitcoin products experienced the largest outflows, totaling $404 million. However, some analysts anticipate a potential catalyst for Bitcoin after the summer recess. Matrixport suggests that fiscal uncertainty following Congress's return after Labor Day could benefit Bitcoin.
Matrixport's report stated, “Fiscal uncertainty has historically been a powerful tailwind for hard assets, and Bitcoin remains front and center in the narrative.”
Ether Sees Continued Inflows
Despite the overall outflows, Ether (ETH) exchange-traded products (ETPs) continued their streak of positive inflows, adding $133 million. This marks the 15th consecutive week of net positive inflows. CoinShares attributes this to robust positive sentiment surrounding Ether.
Other altcoins also saw positive fund flows:
- XRP (XRP): $31.2 million
- Solana (SOL): $8.8 million
- Sui (SUI): $5.8 million
The recent market recalibration reflects ongoing adjustments in the crypto space amidst global economic factors and regulatory developments. For projects navigating these shifts, a robust security framework is essential. Platforms like Codeum offer solutions like smart contract audits and KYC/AML compliance to enhance trust and security within the ecosystem.