Crypto Investment Products Face $305 Million Outflow as Sentiment Turns Negative
Crypto investment products saw significant outflows amounting to $305 million last week as negative sentiment spread across various providers and regions, as per CoinShares’ latest weekly report.
James Butterfill, CoinShares’ head of research, attributed the outflows to stronger-than-expected US economic data, which reduced the likelihood of a 50-basis point interest rate cut. He mentioned, “We continue to expect the asset class to become increasingly sensitive to interest rate expectations as the FED gets closer to a pivot.”
Bitcoin and US Hit Hard by Outflows
Bitcoin faced the majority of these outflows, with asset managers like Grayscale, ProShares, and 21Shares all reporting net losses. The top crypto saw outflows of $319 million, while the US recorded a total outflow of $318 million. On the other hand, short Bitcoin investment products experienced their highest inflows since March, attracting $4.4 million for the second consecutive week.
Ethereum also witnessed outflows, losing $5.7 million, with trading volumes stagnating at 15% of those seen during the US ETF launch week. Galaxy Digital highlighted that Ethereum ETFs were trading significantly lower volumes compared to Bitcoin ETFs due to prime trading desks not yet offering margin on Ethereum ETFs.
Solana and Blockchain Equities Defy Negative Trend
In a positive turn amidst the market negativity, Solana attracted $7.6 million in inflows. Blockchain equities also showed positive momentum, with $11 million flowing into products focused on Bitcoin miners. These miners are finding new ways to leverage their BTC mining equipment by providing computational power to AI companies, with VanEck projecting that if Bitcoin miners allocate 20% of their energy capacity to AI computation by 2027, they could increase their average yearly profits to nearly $14 billion.
