Bitcoin Leads $726 Million Crypto Investment Outflows Amid Rate Cut Uncertainty

2 mins
Updated by Daria Krasnova
Join our Trading Community on Telegram

In Brief

  • Bitcoin led crypto outflows last week with $643M in negative flows; Ethereum followed, losing $98M.
  • Uncertainty over US economic events and interest rate cuts contributes to cautious sentiment.
  • Solana saw positive inflows of $6.2M, bucking the trend of negative crypto investment flows.
  • promo

Bitcoin (BTC) led last week’s crypto investment outflows, seeing $643 million in negative flows. Ethereum followed with outflows totaling $98 million, while Solana stood out with positive inflows of $6.2 million.

Traders and investors remain uneasy as they brace for key US economic events this week and throughout September, which could significantly impact market sentiment.

Bitcoin At The Forefront of Crypto Investment Outflows

Crypto investment products saw outflows of $726 million last week, levels not seen since March. The US dominated the outflows, contributing $721 million in negative flows, highlighting regional concerns ahead of key economic events.

The latest CoinShares report ascribes the negative flows to interest rate cut uncertainty. This followed last week’s weak jobs report and other US economic data, which left traders and investors cautious about future market conditions.

“This negative sentiment was driven by stronger-than-expected macroeconomic data from the previous week, which increased the likelihood of a 25 bp interest rate cut by the US Federal Reserve. However, daily outflows slowed later in the week as employment data fell short of expectations, leaving market opinions on a potential 50bp rate cut highly divided. The markets are now awaiting Tuesday’s Consumer Price Index (CP|) inflation report, with a 50bp cut more likely if inflation comes in below expectations,” read the report.

Read more: How To Trade a Bitcoin ETF: A Step-by-Step Approach

Crypto Investment Flows, Source: CoinShares
Crypto Investment Flows. Source: CoinShares

Variations in the CME Fed Watchtool reflect this trends. After last Friday’s jobs report, the probability of a 50 basis points (bps) rate cut rose to 55%, compared to 45% for a 25 bps cut.

By Monday, however, the tool indicated a 75% probability of a 25 bps cut, with only a 25% chance of a 50 bps reduction. These shifts highlight ongoing uncertainty, with most expecting a rate cut at the September 17-18 Federal Reserve meeting, though the size remains unclear.

This week’s US economic calendar, particularly the August Consumer Price Index (CPI) report on Wednesday, could intensify the uncertainty. The CPI data from the Bureau of Labor Statistics (BLS) will be pivotal in shaping the Fed’s upcoming rate decision. Some experts argue that rate cuts might negatively impact Bitcoin.

Read more: How to Invest in Ethereum ETFs?

Bitcoin ETF Flows
Bitcoin ETF Flows. Source: Farside Investors

Meanwhile, Bloomberg reported the longest streak of daily net outflows from US Bitcoin ETFs since their listing, with investors withdrawing nearly $1.2 billion over eight consecutive trading days leading up to September 6.

Ethereum has also seen declining institutional interest, mirroring Bitcoin’s struggles. Data from Farside shows almost zero flows for most Ethereum ETFs, while Grayscale reports negative flows, explaining the $98 million outflows for Ethereum last week.

Top crypto projects in the US | October 2024
Exodus Exodus Explore
Coinrule Coinrule Explore
Uphold Uphold Explore
Coinbase Coinbase Explore
Chain GPT Chain GPT Explore
Top crypto projects in the US | October 2024
Exodus Exodus Explore
Coinrule Coinrule Explore
Uphold Uphold Explore
Coinbase Coinbase Explore
Chain GPT Chain GPT Explore
Top crypto projects in the US | October 2024

Trusted

Disclaimer

In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content. Please note that our Terms and ConditionsPrivacy Policy, and Disclaimers have been updated.

Lockridge-Okoth.png
Lockridge Okoth
Lockridge Okoth is a journalist at BeInCrypto, focusing on prominent industry companies such as Coinbase, Binance, and Tether. He covers a wide range of topics, including regulatory developments in decentralized finance (DeFi), decentralized physical infrastructure networks (DePIN), real-world assets (RWA), GameFi, and cryptocurrencies. Previously, Lockridge conducted market analysis and technical assessments of digital assets, including Bitcoin and altcoins such as Arbitrum, Polkadot, and...
READ FULL BIO
Sponsored
Sponsored