Bitcoin News Today: Bitcoin faces $404M outflow amid FOMC caution and strong USD data

Digital asset funds experienced a notable shift in the latest week, with a total of $223 million in outflows, ending a 15-week streak of inflows. Bitcoin led the exodus with a $404 million outflow, marking a stark contrast to the positive momentum seen in recent weeks. The reversal came amid a hawkish stance from the Federal Open Market Committee (FOMC) and stronger-than-expected U.S. economic data, which heightened macroeconomic uncertainty and triggered risk-off behavior across asset classes [1].

The week began with a surge of optimism, as digital asset funds initially attracted $883 million in inflows. However, sentiment quickly deteriorated as investors pulled back amid concerns over prolonged high interest rates and the associated impact on riskier assets such as cryptocurrencies. Bitcoin’s outflow underscores a growing wariness among both retail and institutional investors, who are recalibrating positions in anticipation of potential market corrections [1].

In contrast, Ethereum bucked the trend, recording $133 million in inflows for the 15th consecutive week. This continued support suggests that investors remain bullish on Ethereum’s long-term prospects, particularly with its ecosystem progressing toward key upgrades and increased decentralized finance (DeFi) activity. The divergent performance between Bitcoin and Ethereum highlights the varying degrees of market confidence across different digital assets [1].

The outflows also coincided with a significant event in the crypto industry: India’s largest cryptocurrency exchange, CoinDCX, resumed user withdrawals following a $44 million security breach linked to a compromised third-party infrastructure provider, BitGo. The exchange emphasized that its core systems were not affected and that user funds remained secure. Despite the incident, CoinDCX reported record trading volumes in July and denied rumors of a $900 million acquisition by Coinbase [2].

An internal investigation into the breach led to the arrest of a 30-year-old software engineer accused of manipulating internal systems and diverting funds. While the exchange maintains no user assets were lost, the incident has raised concerns about the vulnerabilities of third-party integrations and the need for stronger security protocols across the crypto industry. Trust, already a sensitive issue in the sector, has come under further scrutiny as platforms navigate the challenges of regulatory uncertainty and operational transparency [2].

Analysts suggest that the recent outflows are largely short-term reactions to macroeconomic signals rather than long-term shifts in investor sentiment. The digital asset market is now in a wait-and-see mode, with investors closely monitoring upcoming FOMC statements and inflation data for clarity on the trajectory of U.S. monetary policy. The coming weeks will be critical in determining whether this outflow is a temporary correction or the beginning of a broader risk-off phase [1].

As the market digests these developments, the interconnectivity of the digital asset space becomes increasingly evident. Events such as the CoinDCX breach and Bitcoin’s outflow demonstrate how vulnerabilities in one part of the ecosystem can ripple across the entire industry. For now, the balance between caution and confidence remains delicate, with investors navigating an environment shaped by macroeconomic volatility and evolving security dynamics.

Source:

[1] Title1 (https://example.com/1)

[2] CoinDCX Resumes Withdrawals After $44 Million Hack: ET (https://www.cryptotimes.io/2025/08/04/coindcx-resumes-withdrawals-after-44-million-hack-et/)