FOMC triggers $600M crypto outflows
Last week, the sector of digital asset investments faced withdrawals amounting to $600 million, according to a recent analysis by CoinShares.
The findings indicated that the outflows experienced last week were the most significant since the 22nd of March.
CoinShares attributed this downturn to an unexpectedly stringent stance from the Federal Open Market Committee (FOMC), which led investors to reduce their holdings in assets with a fixed supply.
By the end of the reporting period, the total assets under management (AUM) for products related to cryptocurrencies stood at $94 billion, experiencing a 6% decrease from the prior week's $100 billion.
Moreover, a noticeable decline in trading activity caused trading volumes to drop during the evaluated week.
According to findings by CoinShares, trading volumes settled at US$11 billion for the week, falling short of the US$22 billion weekly average observed this year, yet significantly higher than US$2 billion a week recorded last year.
On a regional basis, the United States accounted for the majority of the week’s fund withdrawals from crypto products, with outflows reaching $565 million. This constituted 94% of the total withdrawals from digital asset products in that timeframe.
Performance of Bitcoin and Ethereum
Investment products backed by Bitcoin experienced outflows of $621 million last week. This increase in withdrawals contributed to a downturn in the prime cryptocurrency's year-to-date (YTD) flows.
By the close of the period under consideration, BTC's YTD flows had fallen to $16.1 billion, marking a 4% decrease from the week before.
Conversely, products betting against Bitcoin witnessed inflows throughout the same timeframe.
On a more positive note, the alternative cryptocurrency (altcoin) sector saw more favorable trends. The report highlighted that Ethereum, the foremost altcoin, attracted inflows of $13 million over the week, boosting the coin’s YTD flows to $94 million.
Other altcoins, including LDO, XRP, LINK, and BNB, also saw inflows, recording $2 million, $1 million, $800,000, and $300,000 respectively.
