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In summary
- Crypto funds recorded inflows of $308 million, but suffered record outflows of $576 million after the Fed’s hawkish speech.
- Bitcoin fell 13% on the week after reaching an all-time high of $108,000; now trading at $93,245 according to CoinGecko.
- Investors shifted focus from Solana to Ethereum, with inflows of $51 million into ETH and outflows of $8.7 million into SOL.
Cryptocurrency funds remained in the green last week, although inflows fell sharply, as crypto products experienced a record day of outflows following a hawkish or restrictive speech from the head of the Federal Reserve.
Speculators pumped a total of $308 million into funds over the course of last week, including Bitcoin ETFs. But on Thursday, investors withdrew a record $576 million, data from European fund manager CoinShares shows. By Friday, that figure had risen to $1 billion.
CoinShares indicated that the sudden change with investors pulling back was “likely in response to the hawkish dot chart released” by the Federal Reserve. Those funds had added assets of more than $3.2 billion the previous week, meaning inflows fell more than 90% week over week.
The U.S. central bank last week cut interest rates — as expected — but Fed Chair Jerome Powell said he would not cut rates as aggressively in 2025, spooking investors in the process. Assets like Bitcoin and other cryptocurrencies have historically performed better in a low interest rate environment.
After the Fed speech, Bitcoin and other major assets fell sharply. Bitcoin is now trading at $93,245 per coin, after falling nearly 13% over a seven-day period, CoinGecko shows. Last Tuesday, it hit a new all-time high of just over $108,000, just before the crash.
CoinShares also indicated on Monday that investors seeking exposure to altcoins last week through exchange-traded products switched from Solana to Ethereum. Products that give exposure to Ethereum, the second largest digital currency, received $51 million in inflows, while Solana experienced $8.7 million in outflows.
Investment funds that track the price of cryptocurrencies have performed particularly well following the US presidential election of Donald Trump, as the President-elect campaigned to help the cryptocurrency industry.
Edited by Andrew Hayward
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