Digital asset investment products suffered a tough week. They registered Bitcoin ETF outflows and Ethereum funds totaling $1.17 billion. This massive capital withdrawal is due to growing market uncertainty. Digital asset manager CoinShares was responsible for reporting on these movements in its latest report.
The CoinShares report, published by Head of Research James Butterfill, details the figures. BlackRock’s iShares funds (Bitcoin and Ethereum) led the losses with $876 million withdrawn. Additionally, the Fidelity Wise Original Bitcoin Fund saw $438 million in outflows. In contrast, Solana (SOL) defied the market’s negative trend. SOL attracted $118 million in inflows last week, extending its positive streak to $2.1 billion over the last nine weeks. Other altcoins like HBAR ($26.8 million) and Hyperliquid ($4.2 million) also registered interest.
The negative sentiment driving the sales appears to be directly linked to the U.S. Federal Reserve (Fed). The odds of a December interest rate cut fell sharply from 91.7% to 64.6%, according to the CME FedWatch Tool. Historically, rate cuts have driven capital toward higher-risk assets, such as cryptocurrencies. Recent caution from Fed Chair Jerome Powell has cooled optimism.
Is Investor Sentiment Shifting Due to Monetary Policy?
The CoinShares report also highlights a notable regional divergence. Negative sentiment is heavily concentrated in the United States. U.S. exchanges recorded $1.2 billion in net sales. On the other hand, Europe showed a different, more optimistic picture. Germany and Switzerland posted combined inflows of $91 million ($41.3M and $49.7M, respectively). James Butterfill noted that despite the outflows, trading volumes remained high at $43 billion for the week.
While Bitcoin and Ethereum feel the pressure, the altcoin market shows selective resilience. Solana’s strength, accumulating $2.1 billion in 9 weeks, indicates a clear capital rotation. Investors are now assessing whether the Bitcoin ETF outflows are a temporary reaction. The Fed’s next decision will be crucial in defining the direction of the digital economy in the short term.
