Crypto investment products experienced a significant shift last week, with a $223 million outflow marking the end of a 15-week period of consistent inflows, as reported by CoinShares. The week began on a positive note with $883 million in inflows, but broader macroeconomic conditions in the US triggered the outflow. Hawkish statements from the Federal Open Market Committee (FOMC) and stronger-than-expected economic data contributed to negative market sentiment.
Despite weak payroll data towards the end of the week hinting at a dovish approach by the Fed, overall market sentiment remained “risk-off,” resulting in substantial outflows, especially on Friday when over $1 billion exited the market. CoinShares’ Head of Research, James Butterfill, noted that over the past 30 days, digital asset investments saw a net inflow of $12.2 billion, accounting for approximately 50% of the total inflows for the year. He suggested that the recent outflow could be attributed to minor profit-taking.
In terms of specific cryptocurrencies, Ethereum continued to outperform Bitcoin, securing another week of victory. Bitcoin saw significant outflows, with $404 million leaving the market due to negative sentiment outweighing any positive activity in other digital assets. However, Bitcoin’s year-to-date inflows remained robust at around $20 billion, showcasing its enduring appeal despite market volatility.
On the other hand, Ethereum led the inflow chart last week with $133 million, despite experiencing losses towards the end of the week. This brought Ethereum’s year-to-date inflows to approximately $8 billion, highlighting the positive sentiment towards the digital asset. Some analysts even suggested the onset of an “altseason” due to ETH’s performance.
The performance of other altcoins also reflected this positive sentiment, with XRP, Solana, and SEI seeing inflows of $31.2 million, $8.8 million, and $5.8 million, respectively. However, Litecoin and Sui experienced smaller outflows of $0.2 million and $0.8 million. These numbers indicate a shift in investor capital from Bitcoin to more promising assets like Ethereum and other altcoins.
Overall, the cryptocurrency market experienced a week of significant fluctuations, with outflows disrupting the previous trend of consistent inflows. The shifting market dynamics and investor sentiment towards different digital assets suggest a continued evolution in the crypto investment landscape.