Crypto asset investment products experienced a challenging week as money outflows registered for the first time in the last 15 consecutive weeks of capital inflows.
According to data reported today by market analyst Mister Crypto, a total of $223 million moved out from crypto-centric investment products over the past week.
These outflows align with investor cautiousness regarding a recent hawkish FOMC meeting (last week), which left interest rates unchanged, and a better-than-anticipated U.S. economic data report announcement. The two macroeconomic events are believed to be causing a declining user interest in the market.
BTC Leads Weekly Outflows
Last Friday alone, capital outflows were more than $1 billion, indicating the increased turbulence of the virtual currency market affected by major economic shifts.
Bitcoin was the most affected cryptocurrency, as it experienced massive outflows worth $4.04 billion over the week. Regardless of these outflows, total annual inflows (valued at $20 billion) indicate the continuing user attraction to the largest digital asset.
ETH sustained its resilience, registering positive flows over the past 15 weeks, with cumulative inflows standing at $1.33 billion. Other upcoming crypto assets witnessed net inflows, with the likes of XRP, SOL, and SEI pulling in $31.2 million, $8.8 million, and $5.8 million, in that order.
What This Means in Investing
Traders are cooling down because of rising cautiousness regarding macroeconomic events and the impact of central bank policy on consumer behaviour. Although the money outflow noted last week does not give an outlook of a long-term trend, it points out a substantial turning point after a recent, long period of capital inflows.
The outflows noted during the week could be an indicator of a change in market sentiment, as investors appear to be rechanneling their money to safer (more stable) investment options.
Despite this obstacle, the virtual currency world has displayed stability, and time will tell whether it will be able to bounce back from this latest impediment. The fund withdrawals highlight the significance of robust risk management and diversification.
