According to Cointelegraph, cryptocurrency investment products experienced significant outflows last week following robust economic reports from the United States. Digital asset investment products saw outflows totaling $305 million, driven by stronger-than-expected economic data, as detailed in CoinShares' latest digital asset fund flows report published on September 2.
The report highlights that from August 24 to August 31, US investors led the global sell-off of crypto investment products, with outflows amounting to $318 million. Germany and Sweden also recorded outflows of $7.3 million and $4.3 million, respectively. Conversely, Switzerland and Canada saw minor inflows of $5.5 million and $13.2 million, respectively.
The US Commerce Department reported on August 30 that the Personal Consumption Expenditures (PCE) price index increased by 0.2% for the month and 2.5% year-over-year. As consumer spending is a key driver of economic growth in the US, the PCE is a preferred inflation measure for the US Federal Reserve, which is expected to implement its first interest rate reduction in over four years. The PCE report suggested a 24 basis point reduction, lowering the likelihood of a 50 basis point cut.
CoinShares noted in its report that the asset class is becoming increasingly sensitive to interest rate expectations as the Federal Reserve approaches a potential pivot. Bitcoin-based investment products led the negative sentiment, with $319 million in outflows. In contrast, short Bitcoin investment products saw a second consecutive week of inflows totaling $4.4 million, the largest since March 2024.
Ethereum-based investment products also experienced outflows of $5.7 million, continuing a downward trend despite the recent launch of Ethereum exchange-traded funds (ETF) in the US on July 23, 2024. However, blockchain equities bucked the trend, seeing $11 million in inflows, particularly into Bitcoin miner-specific investment products.
