Is Bitcoin losing steam with mainstream investors and institutions? Data looking at how much money is flowing into and out of the new Bitcoin exchange-traded funds (ETFs) appears to show just that.
CoinShares data shows that U.S. investors cashed $725.7 million out of crypto investment funds—the highest weekly tally since March. Almost all the bearishness comes from the States, CoinShares said, as European investors actually put some cash into crypto funds last week.
Bitcoin ETFs made up the bulk of the bleeding last week, with $643 million leaving such products, with Ethereum funds losing $98 million as well. Most of that came from the legacy Grayscale Ethereum Trust, which was converted from a closed-end fund to a spot ETF when such products were approved for trading in July.
Bitcoin ETFs in the U.S. have now collectively marked eight straight trading days of losses, with nearly $1.2 billion redeemed during that span, Farside data shows. The funds were approved by the SEC in January following a decade of attempts.
Bitcoin’s price is now significantly lower than its March all-time high of $73,737, according to CoinGecko. It’s currently trading hands for $56,450, dipping by 3% over the past week.
European asset manager CoinShares said in a report Monday that the rush away from crypto ETFs is due to data coming out of the U.S. economy—and investors fretting over how much the Federal Reserve will cut interest rates.
“We believe this negative sentiment was driven by stronger-than-expected macroeconomic data from the previous week, which increased the likelihood of a 25 basis point (bp) interest rate cut by the U.S. Federal Reserve,” the report said, adding that outflows slowed later in the week.
On Friday, weaker-than-expected data coming out of the U.S. on Friday rattled global markets; crypto wasn’t the only market hit hard, either, as the S&P 500 suffered its worst week since March 2023.
Investors are expecting the Federal Reserve to lower interest rates this month for the first time since it hiked them to a two-decade high in 2022.
The question now is by how much. Bitcoin and other cryptocurrencies are considered “risk-on” assets, meaning their prices are prone to volatility. A high-interest rate environment can make such investments less appealing.
CoinShares added in its report that there is some bullishness in the European markets: investment funds on the continent giving investors exposure to assets like Solana experiencing inflows: Last week, $6.2 million hit Solana investment vehicles, the report noted.
Solana, the fifth biggest coin by market cap, is now priced at $133, rising by nearly 1% over the last seven days.
Edited by Andrew Hayward