Crypto Investment Products Face Weekly Net Outflows
Digital asset investment products managed by firms including BlackRock, Bitwise, Fidelity, Grayscale, ProShares, and 21Shares recorded net outflows of $812 million last week, according to data from CoinShares. The developments mark a shift following several weeks of inflows.
Outflows Linked to Changing Rate Cut Expectations
The net outflows occurred as market expectations for two further U.S. rate cuts in 2024 faded. This change followed strong macroeconomic data reports, notably revised GDP and durable goods figures, according to James Butterfill, Head of Research at CoinShares.
Despite the recent weekly reversal, cumulative inflows remain notable. Month-to-date figures show net inflows of $4 billion, while the year-to-date total stands at $39.6 billion. These inflows suggest the market still has momentum comparable to last year's total of $48.6 billion, according to Butterfill.
Regional Trends: U.S. Leads Outflows
Geographically, the U.S. led with $1.04 billion in net outflows from digital asset investment products. In contrast, Switzerland, Canada, and Germany posted net inflows of $126.8 million, $58.6 million, and $35.5 million, respectively. CoinShares noted that negative investor sentiment was concentrated primarily in the U.S. region.
Asset Breakdown: Bitcoin and Ethereum
Bitcoin-based funds dominated weekly outflows, losing $719 million. Data also showed that there was no significant uptick in demand for short-Bitcoin investment products. Butterfill indicated that this points to low-conviction sentiment behind the outflows, which may prove temporary.
U.S. spot Bitcoin exchange-traded funds (ETFs) accounted for $897.6 million in outflows, led by Fidelity's FBTC product, which reported $737.8 million withdrawn.
Ethereum funds experienced $409 million in outflows, while U.S. spot Ethereum ETFs lost $795.8 million over the same period.
Solana and XRP Funds Attract Inflows
While most crypto investment products faced outflows, Solana and XRP funds were notable outliers. Solana products saw net inflows of $291 million, and XRP funds added $93.1 million. According to CoinShares, this trend could reflect optimism over potential U.S. ETF launches for these assets.
- Total weekly outflows: $812 million
- Year-to-date inflows: $39.6 billion
- Main outflows: U.S. Bitcoin and Ethereum products
- Main inflows: Solana and XRP
Despite the short-term reversal, the overall trend in digital asset investment vehicles remains positive so far in 2024.
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