Investors pulled $72 million from funds tracking digital assets in the week ending September 7, marking the biggest outflows since March, according to CoinShares data. This is the second consecutive week of outflows from these products, reflecting growing uncertainty in the market.
Bitcoin-focused funds experienced notable outflows, while bets against the cryptocurrency increased. Short-bitcoin products saw inflows of $3.9 million, following $4.4 million the previous week. CoinShares analysts said the negative sentiment to stronger-than-expected macroeconomic data, which increased the likelihood of a 25-basis-point interest rate cut by the Federal Reserve.
Outflows from digital asset funds slowed slightly after recent employment data kept alive the possibility of a larger 50-basis-point cut. Bitcoin, like many risk-sensitive assets, has been closely tied to expectations surrounding the US economy and Federal Reserve policy. The cryptocurrency fell 8.7% in August and has declined 3.4% so far in September. A more substantial rate cut next week could provide a boost to the struggling crypto market.
Ethereum funds saw nearly $100 million in outflows, as inflows into new spot ETFs tracking the currency have dried up. In contrast, altcoin Solana attracted $6.2 million in inflows, highlighting a more selective interest in the broader crypto space.
Despite recent weakness, BlackRock’s spot bitcoin ETF has gained 17% year-to-date, outperforming the S&P 500’s 15% rise over the same period.
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