Significant Outflows Hit Crypto ETFs Amid Federal Reserve Concerns

Significant Outflows Hit Crypto ETFs Amid Federal Reserve Concerns

Products and funds traded on the digital asset exchange faced significant outflows last week, losing $600 million, the biggest loss since March 22, according to a June 17 report from CoinShares.

The “Weekly Wealth Fund Flows” report highlighted that outflows were mainly driven by Bitcoin investment vehicles, which saw an outflow of $621 million. In contrast, there was a modest $1.8 million inflow into short Bitcoin funds. The report attributed this capital flight to the Fed’s more hawkish than expected stance, proposing to maintain high interest rates. This outlook likely caused investors to pull back from fixed-supply assets like Bitcoin.

Despite the bad scenario for Bitcoin, altcoins showed resilience. Ether investment instruments saw inflows of $13.2 million, while LIDO and XRP investment products saw inflows of $2 million and $1.1 million, respectively. Other altcoins, including BNB, Litecoin, Cardano, and Chainlink, also recorded small weekly inflows. However, these gains fell short and led to a decline in total digital assets under management.

Despite the initial excitement following the launch of Bitcoin exchange-traded funds (ETFs) in the United States, many experts believe institutional participation is still nascent. Franklin Templeton CEO Jenny Johnson argued that corporate adoption is still in its infancy. A stronger wave of institutional interest and capital deployment is likely to emerge in the next phase of investment, she suggested.