Digital asset investment products experienced a net outflow totalling $223 million last week, abruptly ending a 14-week streak of continuous inflows. This shift in capital movement occurred alongside a notable downturn in the broader cryptocurrency market.
Bitcoin (BTC) funds were the primary driver of the outflow, suffering net withdrawals of $404 million. Investor sentiment turned negative, largely attributed to perceived hawkish commentary on monetary policy by the U.S. Federal Reserve (Fed), which triggered a risk-off reaction.
In stark contrast to Bitcoin, Ethereum (ETH) investment funds demonstrated resilience. ETH-based products recorded a net inflow of $133.9 million, marking their fifteenth consecutive week of positive inflows. This divergence points towards an evolving investor preference within the digital asset space.
The immediate catalyst for the sell-off is cited as a more hawkish tone emanating from the U.S. Federal Open Market Committee (FOMC), prompting U.S.-based investors to significantly reduce exposure, leading to $383 million in outflows from their region.
Despite the broad outflow trend, BlackRock’s Spot Bitcoin and Ethereum ETFs emerged as significant exceptions, attracting substantial net inflows of $355.3 million and $394.2 million, respectively.
The overall cryptocurrency market capitalization reflected the turmoil, declining by 9.48% over the week. This substantial drop equated to an approximate loss of $370 billion in value across the market.