Crypto Fund Outflows Hit Highest Levels Since March Last Week Amid Bitcoin ETFs Decline

September 9, 2024

Last week, the crypto investment market saw a significant downturn, with digital asset products experiencing net outflows of $725.7 million. The majority of these outflows were from bitcoin (BTC) products as investors pulled their funds from spot U.S. exchange-traded funds (ETFs) for the leading cryptocurrency for eight consecutive days.

According to CoinShares, bitcoin funds alone suffered losses of $643 million, while their ether (ETH) counterparts saw a decrease of $98 million. The outflows were predominantly concentrated in the U.S., with $721 million exiting the market.

Bitcoin faced a decline of over 8% throughout the week, concluding on Friday at $54,000 after hovering around $59,000 on September 2. This period coincided with a flurry of economic data releases from the U.S., all of which, including the highly anticipated nonfarm payrolls report, showed weakness. Despite speculation about a potential 50 basis-point rate cut by the Federal Reserve, this news failed to ignite significant movement among bitcoin enthusiasts.

Spot bitcoin ETFs in the U.S. also experienced continuous net outflows, marking an eight-day losing streak. This streak is unprecedented since the ETFs were introduced in January, as reported by Bloomberg.

Looking ahead, traders are keeping a close watch on the upcoming release of August’s Consumer Price Index (CPI) on Wednesday and Producer Price Index (PPI) on Thursday in the U.S. Additionally, the first debate between presidential candidates Donald Trump and Kamala Harris is scheduled for Tuesday, preceding the November election.

In summary, the past week was challenging for crypto investment products, particularly bitcoin, as significant outflows were recorded amidst market uncertainties and economic data releases. The continuous net outflows from spot bitcoin ETFs in the U.S. underscore the prevailing cautious sentiment among investors. The upcoming economic indicators and political events in the U.S. are expected to influence market dynamics in the coming days.