According to CoinShares, institutional investors offloaded $101.5 million worth of digital asset products from the Federal Reserve last week in “anticipation of tightening monetary policy.”
US inflation rates hit 8.6% yoy in late May, marking a return to levels not seen since 1981. As a result, the market expects the Fed to take significant action to boost inflation, with some traders pricing in three more 0.5% rate hikes through October.
According to the latest edition of CoinShares’ weekly Digital Asset Fund Flows report, outflows between June 6 and June 10 were mostly led by investors from Americas at $98 million, while Europe accounted for just $2 million.
Products offering exposure to crypto’s two main assets, bitcoin (BTC) and ether (ETH), accounted for almost all of the outflows at $56.8 million and $40.7 million apiece. The month-to-date figures also paint a bleak number with outflows for BTC products worth $91.1 million and total outflows for ETH products at $72.3 million:
“What has pushed Bitcoin into a ‘crypto winter’ over the past six months can broadly be explained as a direct result of increasingly aggressive rhetoric from the Federal Reserve.”
While CoinShares has hinted that Bitcoin has been pushed into a crypto winter, year-to-date (YTD) inflows for BTC investment products still stand at $450.8 million. In comparison, funds offering exposure to ETH have seen hefty outflows of $386.5 million year-to-date, suggesting that sentiment among institutional investors is still strongly in favor of digital gold.
The report also highlighted that total assets under management (AUM) for ether funds “fell from its peak of $23 billion in November 2021 to $8.7 billion” since last week.
In particular, it appears that institutional investors dumped their BTC and ETH products before most of the recent price carnage happened in both assets.
Related: Bitcoin price falls to its lowest level since May as the Ethereum market trades down 18.4%
According to data from CoinGecko, between June 6 and June 10, the price of BTC and ETH fell by 4.7% and 5.9%, respectively. Since June 11, however, BTC and ETH are down around 25.7% and 33.2%, respectively.
Aside from BTC and ETH outflows, multi-asset funds saw outflows of $4.7 million, and short bitcoin products saw minimal outflows of $200,000. At the same time, investors also “stayed away from adding to altcoin positions.”
Flows by asset: CoinShares
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