Bitcoin News Today: Digital Assets Face $223M Outflows as Fed Tightening Fears Spur Selloff

Digital asset investment products experienced a sharp reversal in investor sentiment, with $223 million in outflows recorded last week, marking the end of a 15-week inflow streak. The shift was attributed to concerns over tightening U.S. monetary policy and stronger-than-expected economic data following a hawkish Federal Reserve meeting [1]. The week began with $883 million in inflows, but by Friday, outflows had exceeded $1 billion as markets reacted to fears of prolonged higher interest rates [2].

Bitcoin was the hardest hit, with $404 million in outflows, reflecting its continued sensitivity to macroeconomic developments [3]. Despite this, year-to-date inflows into Bitcoin products remain robust at $20 billion, highlighting sustained institutional interest [4]. In contrast, Ethereum continued to attract capital, posting $133 million in inflows for the 15th consecutive week, a sign of confidence in its long-term fundamentals [5]. XRP also saw inflows of $31.2 million, while Solana and SEI added $8.8 million and $5.8 million, respectively [6].

The outflows had a significant impact on ETFs. Spot Bitcoin ETFs recorded $812.25 million in net outflows on Friday, the second-largest single-day exodus in the history of these products. This wiped out a week’s worth of inflows and reduced cumulative net gains to $54.18 billion [7]. Total assets under management (AUM) across Bitcoin ETFs fell to $146.48 billion, representing 6.46% of Bitcoin’s total market capitalization [8]. Similarly, spot Ether ETFs, which had seen a 20-day inflow streak—the longest in history—logged $152.26 million in net outflows on the same day [9]. The AUM for Ether ETFs now stands at $20.11 billion, or 4.70% of Ethereum’s market cap [10].

Bloomberg’s senior ETF analysts have increased the probability of approval for spot ETFs for Solana, XRP, and Litecoin to 95%, up from 90%, reflecting growing optimism for institutional crypto products [11]. They also anticipate that a crypto index ETF tracking multiple assets could be approved as early as this week, potentially expanding traditional investors’ access to altcoins [12].

Institutional demand for Bitcoin is also spreading beyond ETFs into corporate treasuries. For instance, Metaplanet added another 463 Bitcoin to its treasury, bringing its total holdings to 17,595 BTC. At current prices, this stash is valued at approximately $1.78 billion, with estimated market gains pushing the value closer to $2.02 billion [13].

Last week’s outflows may represent a temporary profit-taking move amid macroeconomic uncertainty, as digital assets have attracted $12.2 billion in net inflows over the past 30 days—nearly half of 2024’s total inflows so far [14]. While the near-term volatility reflects sensitivity to U.S. monetary policy, the broader trend suggests ongoing institutional confidence in digital assets as part of a diversified portfolio.

Source: [1][2][3][4][5][6][7][8][9][10][11][12][13][14]

[1] "Crypto Investment Products See $223M in Outflows Amid Fed Jitters", https://cryptonews.com/news/crypto-investment-products-see-223m-in-outflows-amid-fed-jitters/