Hawkish Fed Rhetoric Drives $102M in Crypto Product Outflows

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In Brief
  • Hawkish rhetoric from the US Federal Reserve led to consistent daily outflows last week, amounting to $102 million.

  • The “crypto winter” experienced over the past six month by Bitcoin and the larger cryptocurrency markets can largely be attributed to the hawkish monetary policy of the Fed.

  • Over the past day, over 180,000 crypto traders saw their positions liquidated to the tune of $500 million.

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Hawkish rhetoric from the US Federal Reserve led to consistent daily outflows last week, amounting to $102 million.

The “crypto winter” experienced over the past six months by Bitcoin and the larger cryptocurrency markets can largely be attributed to the hawkish monetary policy of the Fed, according to the latest CoinShares report. Last week’s outflows predominantly occurred in the Americas, with $98 million in outflows, while in Europe they amounted to a mere $2 million.

Over the past day, over 180,000 crypto traders saw their positions liquidated to the tune of $500 million. Some $210.8 million of those liquidations were Bitcoin, with another $157.6 million for Ethereum. The other big losers were Flamingo with $13 million liquidated, and Solana with $12.7 million.

Coinflows

Bitcoin-based investment products saw most of the outflows last week, totaling $57 million. This brings month-to-date outflows to $91 million, while year-to-date inflows remain at a robust $450 million. In addition to Bitcoin-based outflows, short-bitcoin investment products also saw minor outflows of $200,000. However total assets under management (AuM) remain much lower at $55 million, while long bitcoin investment products amount to $27 billion.

Ethereum-based products’ streak of outflows continued last week, totaling $41 million, bringing total year-to-date outflows to $387 million, roughly 4.4% of AuM. The report underscores that total AuM has fallen from its peak of $23 billion in November 2021 to $8.7 billion. 

While Multi-asset investment products saw $4.7 million of outflows last week, altcoins positions only increased marginally by $200,000 for Litecoin, Cardano, and XRP and $400,000 for Solana. Notably, blockchain equities also succumbed to the negative sentiment with outflows of $5 million last week, as total AuM has fallen 54% from its November 2021 peak to US$1.9 billion.

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Nick is a data scientist who teaches economics and communication in Budapest, Hungary, where he received a BA in Political Science and Economics and an MSc in Business Analytics from CEU. He has been writing about cryptocurrency and blockchain technology since 2018, and is intrigued by its potential economic and political usage.

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