Digital asset investment products saw $1.2 billion in outflows over two weeks, likely due to investor pessimism about potential Fed rate cuts.
Digital asset investment products encountered a second consecutive week of outflows, resulting in a loss of $1.2 billion, which amounted to $584 million.
This could potentially be a consequence of the pessimism among investors regarding prospective Fed interest rate cuts this year, as per CoinShares.
The most recent edition of CoinShares’ Digital Asset Fund Flows Weekly Report indicates that short positions did not increase substantially, but Bitcoin bore the brunt and remained the primary focus, with $630 million in outflows.
Ethereum, which has experienced an uptick in investor interest this quarter, was not immune to the negative sentiment and experienced $58 million in outflows over the past week. It is intriguing that certain altcoins have capitalized on the recent price decline.
These investment products are priced at $2.7 million, $1.3 million, and $1 million, respectively, and are designed for Solana, Litecoin, and Polygon.
XRP and Chainlink-based investment products also experienced minor inflows of $0.7 million and $0.3 million, respectively, during the same period.
The investment firm that specializes in Europe observed that investors likely perceived the decline in the altcoin market as an opportunity to purchase at a reduced price, as evidenced by the $98 million invested weekly in multi-asset products. This trend implies that certain market participants are exploiting the recent weakness to diversify their crypto holdings.
Last week, the trading activity in crypto ETPs reached a low point, with global volumes reaching a mere $6.9 billion. The report indicated that this is the lowest figure registered since the introduction of spot Bitcoin ETFs in January of this year. Canada followed pace with $109 million in weekly outflows, while the United States led the outflows with $475 million.
Germany and Hong Kong followed, with outflows of $24 million and $19 million, respectively. Sweden also experienced minimal outflows of $5.3 million during the week.
In contrast, Switzerland and Brazil experienced inflows of $39 million and $48.5 million, respectively, despite the negative trend.