James Butterfill, Head of Research at CoinShares, explained that the market started on a strong note with $883 million in inflows, but sentiment turned negative after a hawkish Federal Open Market Committee (FOMC) meeting and stronger-than-expected US economic data dampened risk appetite.
“The reversal came swiftly, with over $1 billion in outflows recorded on Friday alone,” Butterfill noted in the report.
Bitcoin, which has historically been the most sensitive crypto asset to monetary policy changes, bore the brunt of last week’s negative flows. The asset saw $404 million in outflows, marking one of the largest weekly pullbacks in recent months.
While Bitcoin experienced notable outflows, other leading altcoins continued to attract capital. Ethereum recorded $133 million in net inflows, marking its 15th consecutive week of positive investment flows, which is seen as a sign of growing confidence in its long-term adoption prospects.
Despite last week’s overall outflows, CoinShares maintains that broader sentiment toward digital assets remains constructive, with total assets under management for crypto investment products still well above last quarter’s levels.
The report emphasized that digital asset products are likely to remain highly sensitive to macroeconomic policy developments, particularly US Federal Reserve decisions on interest rates.
Featured image created with DALL-E, Chart from TradingView
