As a researcher with extensive experience in the crypto market, I’m not surprised to see crypto funds experiencing outflows last week following five consecutive weeks of inflows. The $600 million in net outflows was the largest since March 2024, and it came amidst a corresponding drop in Bitcoin’s price and a more hawkish-than-expected FOMC meeting.
As a crypto investor, I’ve noticed that digital asset funds experienced significant outflows last week, marking a reversal from five consecutive weeks of inflows. Based on data from CoinShares, a total of $600 million was withdrawn from these funds during the week ending June 14. The majority of the outflows were attributed to Bitcoin and Solana funds, with Bitcoin seeing a massive exit of $621 million and Solana experiencing relatively small outflows of $0.2 million. This shift in investor sentiment coincided with a noticeable decline in Bitcoin’s price throughout the week and a more hawkish stance from the Federal Open Market Committee (FOMC) during their meeting, which may have contributed to these outflows.
Crypto Funds Bleed Largest Since March, With Bitcoin In The Lead
Last week, there were withdrawals of approximately $600 million from crypto investment funds following a strong $2 billion inflow the previous week. This marked an end to a five-week streak during which $4.35 billion flowed into these funds. The most recent outflow, as reported by CoinShares, was the largest since March 22, 2024, and it transpired under similar market conditions. Significant inflows totaling $3 billion had been observed in the week before the outflow on March 22. The withdrawals were likely a response to the outcomes of the Federal Open Market Committee (FOMC) meeting, prompting investors to seek refuge in more stable assets.
As an analyst, I would rephrase that statement as follows: At the June 11-12, 2024 meeting, the Federal Open Market Committee (FOMC) kept interest rates unchanged at the range of 5.25%-5.50%. This decision led some crypto investors to reconsider their investments due to cryptocurrencies’ inherently risky and speculative nature. In response, these investors may be seeking safer assets as a precaution against potential market volatility brought about by higher interest rates.
It’s no surprise that the majority of the withdrawals originated from Bitcoin, with leading crypto assets’ funds losing approximately $621 million. A significant portion of these Bitcoin outflows occurred in US-traded Spot Bitcoin Exchange-Traded Funds (ETFs). Last week, these ETFs experienced outflows every day except for a $100.8 million inflow on June 12, resulting in a total withdrawal of $580 million. The bearish sentiment towards Bitcoin among investors was further indicated by the influx of $1.8 million into short Bitcoin products.
Last week, Solana’s investment products experienced withdrawals totaling $0.2 million, while multi-asset investment funds recorded outflows of approximately $1.1 million. The average trading volume during this period was around $11 billion, significantly lower than the yearly average of $22 billion. Consequently, the total assets under management (AuM) dropped from over $100 billion to $94 billion.
In contrast, Ethereum experienced a withdrawal of $13.1 million from investors as excitement for the upcoming Spot Ethereum ETFs heightened. Meanwhile, smaller inflows were observed in BNB, Litecoin, XRP, Chainlink, and Cardano, with amounts of $0.3 million, $0.8 million, $1.1 million, $0.7 million, and $0.8 million respectively.
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2024-06-18 17:46