Bitcoin Drives $726 Million Outflow, Impacting Digital Assets
September 9, 2024
Digital asset investment products experienced significant outflows totaling $726 million, matching the highest recorded outflow earlier this year in March, as per the latest report from CoinShares.
James Butterfill, CoinShares’ head of research, linked this negative sentiment to stronger-than-expected macroeconomic data from the previous week, increasing the likelihood of a 25-basis point interest rate hike by the US Federal Reserve.
Butterfill noted that daily outflows slowed towards the end of the week due to employment data falling short of expectations. This left market opinions divided on the potential for a 50-basis point rate cut, with the focus now shifting to the upcoming Consumer Price Index (CPI) inflation report. A 50-basis point cut is more probable if inflation comes in below expectations.
Bitcoin led the outflows, losing $643 million, resulting in monthly outflows of $645 million. Conversely, short BTC funds saw minor inflows of $3.9 million.
US Bitcoin exchange-traded funds (ETFs) experienced an eight-day outflow streak, leading to net outflows of $721 million in the country. Fidelity’s FBTC fund accounted for most of this, with $405 million in outflows last week.
Following Fidelity, Grayscale’s GBTC saw $280 million in outflows, while Bitwise ETFs ranked third with losses of approximately $60 million. Canada also recorded outflows of $28 million, whereas Europe, specifically Germany and Switzerland, witnessed inflows of $16.3 million and $3.2 million, respectively.
In contrast, Ethereum-based investment products saw net outflows of $98 million last week, primarily due to Grayscale’s converted ETHE fund losing $111 million. This resulted in minimal inflows into other spot Ethereum ETF products, failing to offset the significant outflows.
On a positive note, Solana-based investment products secured $6.2 million in net inflows, marking the largest among digital asset products. However, other digital assets like Cardano experienced outflows of around $800,000 despite completing the first phase of the highly anticipated Chang Hard Fork. In contrast, Litecoin and XRP products saw cumulative inflows of $1.7 million.
