Digital Asset Fund Flows Experience Major Outflows Amid FED Concerns

Largest Outflows Since March

According to CoinShares, digital asset investment products have experienced their largest outflows since March, totaling $1.43 billion. This significant movement comes amid investor concerns regarding potential actions by the Federal Reserve. Trading volumes in Exchange Traded Products (ETPs) surged to $38 billion, approximately 50% higher than this year's average, as investor sentiment fluctuated over U.S. monetary policy.

Impact on Bitcoin and Ethereum

Bitcoin (BTC) was notably impacted, with outflows reaching $1 billion. In contrast, Ethereum (ETH) showed resilience, limiting its outflows to $440 million. This divergence in performance has led to month-to-date inflows of $2.5 billion for Ethereum, while Bitcoin has seen net outflows of $1 billion. Year-to-date data reveals that Ethereum inflows account for 26% of total assets under management, compared to just 11% for Bitcoin, highlighting a shift in investor preference.

Altcoin Performance

Altcoins displayed mixed results during this period. XRP, Solana, and Cronos saw positive inflows of $25 million, $12 million, and $4.4 million, respectively. However, Sui and Ton faced challenges, with outflows of $12.9 million and $1.5 million, respectively.

FED's Influence on Market Sentiment

Investors initially reacted with pessimism early in the week, leading to outflows of $2 billion. However, sentiment shifted following Federal Reserve Chairman Jerome Powell's address at the Jackson Hole Symposium, which was perceived as more dovish than expected, resulting in inflows of $594 million.

For further insights, the full report can be accessed on CoinShares.