According to a report from CoinShares, global cryptocurrency investment funds managed by large asset management companies like BlackRock, Bitwise, Fidelity, Grayscale, ProShares, and 21Shares recorded a modest net inflow of $48 million last week as macroeconomic and monetary policies once again reaffirmed their impact.
Despite a positive start to the week with nearly $1 billion flowing into global crypto investment products, the announcement of new macroeconomic data and the minutes from the latest Federal Open Market Committee meeting indicated that the U.S. economy remains strong and the Fed may tighten monetary policy further. This triggered outflows of up to $940 million in the latter half of the year, according to James Butterfill, Head of Research at CoinShares.
"This indicates that the honeymoon period following the elections in the U.S. has ended and macroeconomic data is once again the main driver of asset prices."
The Divergent Fates of Bitcoin and Ether
Bitcoin-related investment products led the net inflow last week, with $214 million pouring in, despite significant outflows recorded over the weekend. Bitcoin remains the best-performing cryptocurrency fund this year, with a total net inflow of $799 million. U.S. spot Bitcoin ETFs accounted for $312.8 million of the total inflow, although the U.S. market closed on Thursday to honor former President Jimmy Carter.
Conversely, Ethereum-based products recorded the largest net outflow, reaching $256 million last week. Mr. Butterfill stated that the reason might be due to a broad sell-off in the technology market, reflecting a 3.5% decline in the Nasdaq 100 during this period. Spot Ethereum ETFs in the U.S. accounted for $186 million of the total ETH outflow last week.
Altcoins and Optimism for XRP
However, XRP-based products recorded a net inflow of $41 million last week, thanks to increased optimism ahead of the appeal deadline on January 15 in Ripple's lawsuit with the Securities and Exchange Commission (SEC).
Meanwhile, Solana-based funds also saw a net inflow of $15 million.
Additionally, although the values of cryptocurrencies decreased during the week, other altcoin-based products, including Aave, Stellar, and Polkadot, also recorded net inflows.
Last week, Bitcoin fell by 8.6% and is currently trading at $90,889. Ether also dropped by 16.5%, to $3,047.
These developments indicate the volatility of the crypto market amid macroeconomic factors and monetary policy affecting investment flows.
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