The digital asset investment products market experienced a significant $305 million in outflows last week, leading to a widespread negative sentiment among various providers and regions. CoinShares has attributed this trend to the release of stronger-than-expected economic data from the United States. This economic data has not only impacted the market sentiment but has also diminished the likelihood of a 50-basis point interest rate reduction by the Federal Reserve. As a result, the asset manager predicts a shift in the asset class’s behavior as it increasingly reacts to interest rate expectations.
According to CoinShares’ latest Digital Asset Fund Flows Weekly Report, Bitcoin bore the brunt of the negative sentiment, experiencing $319 million in outflows over the past week. Conversely, short Bitcoin investment products witnessed inflows of $4.4 million for the second consecutive week, marking the highest inflow since March. Ethereum (ETH) also faced weekly outflows of $5.7 million, while its trading volumes remained stagnant at only 15% of the levels seen during the US ETF launch week, mirroring pre-launch figures. In contrast, Solana (SOL) attracted $7.6 million in inflows, followed by Binance Coin (BNB) with $0.8 million. Litecoin (LTC) and Cardano (ADA) each saw $0.3 million in inflows.
Regionally, the United States dominated the outflows with a staggering $318 million withdrawn during the week. Germany and Sweden also witnessed outflows, albeit on a smaller scale, with $7.3 million and $4.3 million, respectively. On the other hand, Canada stood out with the highest weekly inflows of $13.2 million, followed by Switzerland with $5.5 million and Brazil with $2.8 million for the same period. Hong Kong and Australia experienced modest inflows of $1.6 million and $1.2 million, respectively.
The digital asset investment products market faced challenges stemming from stronger economic data, resulting in significant outflows and a prevailing negative sentiment. These fluctuations across various assets and regions highlight the market’s sensitivity to economic developments and underline the need for investors to stay informed and adapt their strategies accordingly.