$223 million outflow from cryptocurrency funds, the Federal Reserve's hawkish stance dampens market sentiment, ending a 15-week streak of gains.

CN
8 hours ago

Last week, cryptocurrency investment products recorded a net outflow, ending a 15-week streak of net inflows. The hawkish remarks during the Federal Open Market Committee (FOMC) meeting dampened investor sentiment.

According to the latest report released by cryptocurrency asset management firm CoinShares on Monday, there was a $223 million outflow from global cryptocurrency exchange-traded products (ETPs) last week.

The report noted that despite an inflow of $883 million at the beginning of the week, the trend reversed in the latter half. This was likely influenced by the hawkish tone of the FOMC meeting and a series of better-than-expected economic data from the United States. The report added:

As reported by Cointelegraph last Thursday, comments from U.S. Federal Reserve Chairman Jerome Powell also caused investors' expectations for a rate cut in September to drop from 63% before the FOMC meeting to 40%.

As Bitcoin (BTC) entered August, market sentiment declined. August has historically been one of the worst-performing months for Bitcoin. Data from CoinGlass shows that the median return for Bitcoin in August is -7.49%.

Bitcoin-related products saw an outflow of $404 million last week, accounting for a significant portion of the losses. Although there was a pullback, some analysts believe that Bitcoin's next catalyst may emerge after the summer recess. A research report released by Matrixport on Friday indicated that Bitcoin is expected to gain new attention when the U.S. Congress reconvenes after Labor Day.

The report stated: "Fiscal uncertainty has always been a significant positive for hard assets, and Bitcoin remains at the core of market attention."

Despite the general outflow from global cryptocurrency funds, Ether (ETH)-related ETPs achieved a net inflow for the 15th consecutive week. Even with a market pullback in the latter half of this week, it still attracted $1.33 billion in investment.

The report pointed out that the continued inflow into Ether funds is mainly due to "the strong positive market sentiment surrounding the asset."

Cryptocurrency funds focused on XRP, Solana, and Sui also saw inflows this week, amounting to $31.2 million, $8.8 million, and $5.8 million, respectively.

On Thursday, U.S. President Donald Trump signed an executive order imposing reciprocal import tariffs of 15% to 41% on goods from 68 countries, which will take effect on August 7 (Thursday).

Although Trump's tariff order raised concerns in global markets, Nexo news editor Stella Zlatareva stated that what is happening in the cryptocurrency market is a "rebalancing" rather than a collapse.

In an interview with Cointelegraph, she said: "The digital asset market remains firmly above $3.7 trillion. Structural inflows, institutional investor confidence, and the prospect of clearer U.S. regulation provide support." She added that the stability of other cryptocurrencies is expected to gradually recover.

Related: European Central Bank (ECB) clearly states: Digital euro process accelerates, but cash's status is irreplaceable

Original article: “Crypto funds see $223 million outflows, Fed's hawkish stance dampens market sentiment, ending 15-week winning streak”

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