Outflows from investment crypto products totaled $147 million for the week

As a result, a three-week series of inflows totaling $2 billion was interrupted

07.10.2024 - 15:05

2 min

What’s new? Last week, investors withdrew $147 million from crypto derivatives, which interrupted a three-week series of inflows into such investment products with a total result of almost $2 billion. According to analysts at investment company CoinShares, the reason for the shift in investor sentiment was the decreased likelihood of further easing of monetary policy by the US Federal Reserve by lowering interest rates.

Coinshares report

What else is known? In September, the Fed cut the rate by 50 basis points amid weak summer inflation data and signs of cooling in the labor market. However, the media reported that a later Nonfarm Payrolls report would close the door on another 50 bps rate cut in October.

The report showed strong payrolls and job numbers, so the market is now watching the Consumer Price Index (CPI), which will be released on October 10. According to analysts at QCP Capital, the market is no longer expecting a rapid reversal towards a sharp rate cut. It is allowed to reduce only by 25 bps instead of 50.

As CoinShares analysts write in a new report on the flow of funds in the cryptocurrency sector, regionally, Canada and Switzerland led the way with inflows of $43 million and $35 million, respectively. In turn, the US, Germany, and Hong Kong saw outflows of $209, $8,3, and $7,3 million.

The main outflow came from bitcoin-based products ($159 million). At the same time, inflows into short positions in the asset amounted to $2,8 million.

Ethereum faced an outflow of $29 million, and, according to CoinShares experts, investor interest in the largest by capitalization altcoin remains weak.

An inflow of $29 million was recorded in multi-cryptocurrency investment products, and it has been maintained for the 16th week in a row. In total during this time, the inflow amounted to $431 million or 10% of assets under management (AUM) of crypto investment companies.

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