Crypto Outflows Reflect Investor Uncertainty
Global crypto investment products saw $360 million in net outflows last week, according to asset manager CoinShares. The data marks a sharp reversal from the prior week’s $921 million in inflows, signaling renewed investor caution following remarks by Federal Reserve Chair Jerome Powell.
Powell’s comments on potential December rate cuts were interpreted as hawkish, suggesting that further easing of monetary policy is far from certain. “Despite the recent U.S. interest rate cut, investors interpreted Powell’s comments on the likelihood of another cut in December as ‘not a foregone conclusion,’” said James Butterfill, Head of Research at CoinShares. He added that the combination of a hawkish tone and a lack of major U.S. economic data releases has left investors “in a state of limbo.”
Regional Breakdown: U.S. Drives Outflows
The negative sentiment was strongest in the U.S., which saw $435 million in crypto fund outflows. Europe showed a more optimistic trend, with Germany and Switzerland posting net inflows of $32 million and $30.8 million, respectively. Other regions experienced relatively modest activity.
The broader crypto market mirrored this downturn. Bitcoin (BTC) and Ethereum (ETH) dropped 6.5% and 10.5% last week. The declines ended a six-year streak of October gains, shattering investor hopes for another “Uptober” rally.
Bitcoin Leads Outflows as Solana Gains ETF Momentum
Bitcoin-based exchange-traded products (ETPs) bore the brunt of investor withdrawals, with $946 million exiting last week alone. “Bitcoin remains the digital asset most sensitive to monetary policy developments,” Butterfill noted, explaining how Powell’s stance dampened demand.
U.S. spot Bitcoin ETFs accounted for $799 million of these outflows, led by $403.4 million from BlackRock’s IBIT fund.
Ethereum-based products, however, managed to buck the trend. They saw $57.6 million in net inflows globally, including $16.1 million into U.S.-based spot ETH ETFs — again led by BlackRock’s ETHA.
Solana (SOL) emerged as the standout performer of the week. Solana ETPs recorded $421 million in inflows — the second-largest on record — driven by strong investor demand for newly launched U.S. ETFs. This pushed Solana’s year-to-date inflows to an impressive $3.3 billion.
Market Outlook: Investors Await Clearer Signals
The latest CoinShares report highlights the growing tension between macroeconomic policy and crypto market sentiment. With investors closely watching the Federal Reserve’s next moves, digital assets like Bitcoin remain highly sensitive to even minor shifts in interest rate expectations.
Until the Fed provides clearer guidance on December’s rate decision, the crypto market may continue to oscillate between cautious optimism and defensive positioning.
