- The recent FOMC meeting led to a significant reduction in investor interest in fixed-supply assets.
- Digital asset investment products experienced substantial outflows, amounting to $600 million.
- This marks the largest outflow since March 22, 2024, influenced by declining prices and bearish sentiment, reducing total assets under management from over $100 billion to $94 billion.
The FOMC’s hawkish stance led to digital asset outflows, hitting $600 million, the largest since March 2024, with Bitcoin seeing substantial withdrawals.
Investors Withdraw from Fixed-Supply Assets
The outflows were significantly concentrated on Bitcoin, which saw $621 million in withdrawals as per CoinShares’ Digital Asset Fund Flows Weekly Report. This bearish sentiment also triggered investments in short-bitcoin products, reflecting a belief in continued price declines.
Contrastingly, Ethereum investment products saw inflows of $13.1 million last week. Other altcoins like LIDO and XRP also witnessed inflows of $2 million and $1.1 million, respectively. Litecoin and Chainlink each attracted $0.8 million.
Cardano secured $0.7 million in inflows, while Solana noted slight outflows of $0.2 million over the same period.
Although there was some positivity towards altcoin investment products, trading volumes remained subdued at $11 billion for the week, compared to this year’s average of $22 billion. However, this is still an improvement from the $2 billion weekly volume observed last year.
Exchange-traded products (ETPs) dedicated to digital assets maintained a consistent 31% share of global trading volumes on reputable exchanges.
Geographical Breakdown
The U.S. was most impacted, recording $165 million in outflows. Switzerland followed with $23.7 million in outflows. Canada and Sweden each witnessed $15 million in outflows, while Hong Kong had mild outflows of $1.3 million.
Conversely, Germany recorded inflows of $17.4 million, trailed by Australia with $1.7 million and Brazil with $0.7 million.
Conclusion
In conclusion, the FOMC’s hawkish stance has led to noticeable outflows from digital assets, primarily Bitcoin. While Ethereum and other altcoins have seen some positive movement, overall trading volumes are low. The geographical distribution of these movements highlights varied regional impacts, with the U.S. experiencing significant outflows, while Germany and other regions saw slight inflows, indicating a diversified market response.
