A new report by CoinShares shows that fund flows for digital asset investment products had turned negative last week after registering three consecutive weeks of positive inflows. The asset class saw outflows of $7 million during the week amid fears of further interest rate increases by the Fed.
Bitcoin Funds Saw $10.9m in Outflows Last Week
Digital asset funds registered minor outflows of $7 million last week as stronger-than-expected macro data raised concerns over further interest rate hikes by the Federal Reserve, according to CoinShares. The data marks the first time fund flows fell into the red after three weeks.
Bitcoin funds saw the most substantial outflows of $10.9m, followed by short bitcoin and multi-investment products, with $3.5m and $2.4m in outflows, respectively. This is the 11th straight week of outflows for multi-asset investment products, totaling $21m since the start of the year.
On a positive note, select coins like Ethereum and Solana registered positive fund flows last week, with $5.1m and $0.8 in inflows, respectively. Cosmos, which powers an ecosystem of blockchains designed to scale and interoperate with each other, recorded $1.8m in inflows, almost doubling its assets under management (AUM).
Macro Data Fuels Fears of New Rate Hikes
The last week’s fund flows data marks a notable U-turn from a week earlier when digital asset investment products registered inflows of $76 million. Bitcoin funds led the rally with $69 million, accounting for 90% of all inflows. The week before that, digital asset funds saw $117m in inflows, the largest since July 2022.
The change in sentiment follows a week of macro data that notably beat market expectations, fueling fears that the Fed could continue increasing interest rates in the foreseeable future. The US central bank raised rates by 25 basis points (bps) earlier in the month, bringing the target rate up to between 4.5% and 4.75%.
While the rate hike suggests that the Fed remains determined in its fight against inflation, the slower pace of increases offered some relief to investors after a series of consecutive jumbo hikes in 2022, when inflation hit the highest level in 40 years.
This article originally appeared on The Tokenist
Get Ready To Retire (Sponsored)
Start by taking a quick retirement quiz from SmartAsset that will match you with up to 3 financial advisors that serve your area and beyond in 5 minutes, or less.
Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests.
Here’s how it works:
1. Answer SmartAsset advisor match quiz
2. Review your pre-screened matches at your leisure. Check out the advisors’ profiles.
3. Speak with advisors at no cost to you. Have an introductory call on the phone or introduction in person and choose whom to work with in the future
Get started right here.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
