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Crypto Funds Witness $1 Billion Outflows Amid Market Jitters
Crypto funds experienced significant outflows at the end of last week, totaling $1 billion, including a substantial $576 million in a single day. This downturn can be attributed to market jitters following the Federal Reserve’s hawkish stance.
Digital asset investment products initially recorded $308 million in inflows last week. However, the week ended with a notable $1 billion in outflows over the final two days, including $576 million on December 19, according to data compiled by CoinShares.
Market Reactions to the Federal Reserve’s Hawkish Stance
The sharp outflows can be linked to market reactions to the Federal Reserve’s hawkish stance. Total assets under management for digital asset exchange-traded products fell by $17.7 billion, representing a 0.37% decline in assets under management. This decline marked the 13th largest single-day outflow on record, as stated by CoinShares’ head of research, James Butterfill.
Crypto Asset Performance Amid Outflows
Despite the overall outflows, Bitcoin remained resilient, posting $375 million in net inflows for the week. Ethereum also saw $51 million in inflows, although this came at the expense of Solana, which recorded $8.7 million in outflows. Multi-asset investment products faced the steepest losses, with $121 million in outflows.
Selective interest in altcoins persisted, with notable inflows in XRP ($8.8 million), Horizen ($4.8 million), and Polkadot ($1.9 million).
Bitcoin’s Struggle Above the $100,000 Mark
The outflows come as Bitcoin struggles to stay above the $100,000 mark, briefly falling below $95,000. According to CoinGlass, Bitcoin’s descent triggered a $1.4 billion mass liquidation event, wiping out leveraged long positions within 24 hours.
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