Digital Asset Funds Experience First Outflows in 15 Weeks Amid Hawkish Fed Signals

Digital asset investment products have experienced a shift in market dynamics, recording $223 million in outflows for the first time in 15 weeks, according to CoinShares. This development marks a reversal from the initial inflows of $883 million observed earlier in the week, largely attributed to hawkish signals from the Federal Reserve and unexpectedly strong U.S. economic data.

Bitcoin and Ethereum Investment Trends

Bitcoin (BTC) led the outflows, with $404 million withdrawn over the week. Despite this, year-to-date inflows for Bitcoin remain robust at $20 billion, highlighting its sensitivity to shifts in monetary policy. On the other hand, Ethereum (ETH) managed to attract inflows for the 15th consecutive week, amounting to $133 million, suggesting continued investor confidence in the asset.

Altcoin Inflows and Market Sentiment

While Bitcoin faced significant outflows, other digital assets such as XRP, Solana (SOL), and SEI saw positive inflows. XRP attracted $31.2 million, Solana $8.8 million, and SEI $5.8 million. Additionally, Aave and Sui recorded minor inflows of $1.2 million and $0.8 million, respectively. Despite a general risk-off sentiment, these altcoins demonstrated resilience amidst market fluctuations.

Impact of Economic Indicators

The week’s outflows were further compounded by a risk-off sentiment following the release of weak payroll data, which had dovish implications for the Federal Reserve. However, the overall market response suggested profit-taking behavior, especially after $12.2 billion in net inflows were recorded over the past 30 days, accounting for half of the year’s inflows so far.

For more detailed insights and analysis, readers can visit the CoinShares blog.

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