Digital asset investment products experienced significant outflows last week, driven by reduced expectations of a U.S. interest rate cut following stronger economic data.

The crypto market is currently experiencing widespread negative sentiment across various providers and regions. Digital asset investment products saw outflows totaling $305 million last week.

In a recent update, CoinShares head of research James Butterfill highlighted that these outflows appear to be driven by stronger-than-expected U.S. economic data, which has reduced the likelihood of a 50-basis point interest rate cut by the Federal Reserve.

“We continue to expect the asset class to become increasingly sensitive to interest rate expectations as the FED gets closer to a pivot.” — James Butterfill, CoinShares

The U.S. led the outflows, with $318 million withdrawn. Germany and Sweden also saw outflows of $7.3 million and $4.3 million, respectively. In contrast, Switzerland and Canada recorded minor inflows of $5.5 million and $13 million.

Bitcoin and Ethereum Outflows

Bitcoin bore the brunt of the outflows, shedding nearly $320 million. However, short Bitcoin investment products saw their largest inflows since March, attracting $4.4 million for the second consecutive week. Ethereum also faced outflows of $5.7 million, with trading volumes stagnating at just 15% of the levels seen during the U.S. ETF launch week.

Solana and Blockchain Equities

Interestingly, Solana defied the overall trend, attracting $7.6 million in inflows. Butterfill noted that blockchain equities also experienced positive momentum, with $11 million flowing in, particularly into investment products focused on Bitcoin miners.

In related news, Bitcoin dropped by almost 10% in August, while the Nasdaq 100 index rose by over 2% and gold peaked at an all-time high of $2,530. This performance occurred despite the U.S. dollar index plunging to $100.1, down by over 6% from its highest point this year. Analysts suggested that the likely reason for the sell-off was that investors are concerned about the falling liquidity in the Bitcoin market and rising worries that governments will start selling their holdings.

For more updates on digital assets and investment trends, stay tuned to Global Crypto News.

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