CoinShares reported that global crypto investment products saw a net outflow of $206 million last week, reflecting investors’ concerns about the “potential impact of the Federal Reserve’s policy decisions on interest rates.”
Global Impact of Crypto Outflows on Bitcoin ETFs and Market Volume
CoinShares reported a net outflow of $206 million last week, the second consecutive week of outflows, driven by widespread market expectations that the Federal Reserve will keep interest rates high for a long time.
Outflows have been particularly notable among cryptocurrency investment products offered by asset managers including Ark Invest, Bitwise, Fidelity, Grayscale, ProShares and 21Shares.
James Butterfill, head of research at CoinShares, noted:
“The data showed that investor interest in exchange-traded products (ETPs) and exchange-traded funds (ETFs) continued to wane, most likely due to market expectations that the Federal Reserve will maintain current high interest rates for longer than expected.”
Interestingly, global exchange-traded products saw slightly lower volumes last week, totaling $18 billion and accounting for 28% of total Bitcoin volume. This is down from 55% a month ago.
Net outflows from U.S. spot Bitcoin ETFs contributed significantly to global weekly net outflows, reaching $204.3 million.
However, in this trend, BlackRock's IBIT became the only institution that was able to maintain weekly inflows of Bitcoin ETF funds. It received $165.4 million in inflows, continuing the 69-day inflow record before the Bitcoin halving.
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Crypto fund flows and market trends by region
According to a report by CoinShares, the increase in crypto futures products in the United States led to total net outflows of $244 million last week.
Conversely, Canadian and Swiss funds saw net inflows of $30 million and $8 million, respectively. Global Bitcoin funds accounted for $192 million of the total weekly net outflows.
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Notably, despite the outflows, outflows from short Bitcoin products were small at just $300,000, according to Butterfill, suggesting that few investors saw this as an opportunity to short.
Additionally, Ethereum-based investment vehicles saw outflows for the sixth week in a row, with outflows reaching $34 million. On the other hand, LTC and Chainlink products saw inflows of $3.2 million and $1.7 million, respectively.
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Meanwhile, Blockchain Equity saw outflows for the eleventh week in a row, totaling $9 million. James Butterfill said this was due to “continued investor concerns about the impact of the halving on mining companies.”
Amid these flows, the overall crypto market has seen slight gains over the past 24 hours. Bitcoin, the largest cryptocurrency by market cap, has seen a 1.2% gain, while Ethereum, the second-largest, has seen a nearly 1% increase over the same period.
BTC price moving sideways on 4-hour chart | Source: BTC/USDT on TradingView.com
The price action coincided with Bitcoin’s fourth halving on April 20, which reduced miners’ block subsidy rewards from 6.25 BTC to 3.125 BTC.