For the second week in a row, digital asset investment products experienced outflows totaling US$584 million, resulting in a decrease of US$1.2 billion in the total market. This decline is attributed to investor pessimism about potential interest rate cuts by the Federal Reserve this year.
The primary focus of these outflows was Bitcoin, which saw a withdrawal of US$630 million. Despite the negative sentiment, investors did not increase their short positions on Bitcoin, as evidenced by US$1.2 million in outflows from short positions. Ethereum also faced negative sentiment, experiencing US$58 million in outflows.
According to the Coinshare’s report, the United States saw the largest outflows, amounting to US$475 million. Canada followed with significant outflows of US$109 million. Germany and Hong Kong also experienced outflows of US$24 million and US$19 million, respectively. In contrast, Switzerland and Brazil saw inflows, receiving US$39 million and US$48.5 million, respectively.
Despite the overall negative trend, some altcoins attracted inflows. Solana, Litecoin, and Polygon saw inflows of US$2.7 million, US$1.3 million, and US$1 million, respectively. Multi-asset products also saw US$98 million in inflows, suggesting that investors viewed the weakness in the altcoin market as a buying opportunity.
Last week recorded the lowest trading volumes on Exchange Traded Products (ETPs) globally since US ETFs were launched in January, with just US$6.9 billion traded for the week. This reflects a broader trend of reduced trading activity amidst ongoing market uncertainties.
The recent outflows from digital asset investment products highlight a significant market correction driven by investor concerns over potential interest rate changes by the Federal Reserve. While Bitcoin and Ethereum led the outflows, certain altcoins and multi-asset products saw inflows, indicating selective investor confidence in specific market segments.