Crypto Investment Products See Sharp Outflows Amid Hawkish Fed Signals

(MENAFN- eTrendy Stock) crypto investment products had a significant reversal last week with $415 million in net outflows that put an end to a five-week inflow streak that saw investors pour $6.74 billion into the cryptocurrency space.

The sudden shift is attributed to recent signals from the Federal Reserve, particularly Chairman Jerome Powell's testimony before Congress, which indicated a more hawkish monetary policy stance. Coupled with unexpectedly high U.S. inflation figures, investors appear to have retreated, according to CoinShares' latest Digital Asset Fund Flows report.

Source: CoinShares

The crypto investment outflows stand in stark contrast to the robust inflows seen since the U.S. election, which totaled $29.4 billion over 19 weeks, significantly surpassing the $16 billion seen in the same period following the launch of U.S. spot Bitcoin exchange-traded funds in January of last year.

The exodus was primarily driven by U.S.-based funds, which saw $464 million in outflows. Conversely, some regions bucked the trend, with Germany seeing $21 million in inflows, and Switzerland and Canada adding $12.5 million and $10.2 million, respectively.

Bitcoin Crypto Investment Products See Massive Outflows

Bitcoin-focused crypto investment funds were particularly hard hit, with $430 million in outflows, reflecting the cryptocurrency's sensitivity to interest rate expectations. While Bitcoin's price has also dipped slightly, there was no corresponding surge in short-bitcoin products, which themselves saw outflows.

Despite the overall downturn, Solana investment products saw $8.9 million in inflows, the largest of any cryptocurrency fund, followed by XRP and Sui. Ethereum-based funds, which had seen substantial inflows the previous week, swung to outflows of $7 million.

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