Cryptocurrency investment products have seen significant outflows of $584 million in the past week, adding to the previous week’s figure and totaling about $1.2 billion. However, investments in altcoins have been on the rise. CoinShares’ Digital Asset Fund Flows weekly report suggests that the outflows could be due to investor pessimism surrounding potential interest rate cuts by the Federal Reserve later this year. Products focused on Bitcoin saw $630 million in outflows, while Ethereum products saw $58.3 million leave. Additionally, products shorting BTC and Cardano-focused products also saw significant outflows.
Despite the outflows, there was a surprising $98 million of inflows into products focused on multiple cryptocurrencies, indicating that investors may view weakness in the altcoin market as a buying opportunity. Year-to-date inflows for these products have reached $136 million, with the majority coming in just the past week. This comes after the total market capitalization of the cryptocurrency space, excluding Bitcoin, Ethereum, and stablecoins, dropped from $600 billion to $475 billion in a month due to a market downturn that saw BTC slide to $61,000.
Products offering exposure to altcoins such as Solana, Litecoin, XRP, and Chainlink saw inflows totaling $4.7 million. Solana products received $2.7 million in inflows, while those offering exposure to Litecoin saw $1.3 million in inflows. XRP products had inflows of $700,000, and Chainlink-focused products saw $300,000 in inflows. On the other hand, data shows that long-term Bitcoin holders have begun selling the holdings they accumulated during the bear market in January, coinciding with the listing of spot Bitcoin exchange-traded funds (ETFs) in the United States. In contrast, long-term Ethereum holders continue to accumulate.
Overall, the cryptocurrency market has seen a significant amount of outflows from investment products in recent weeks, potentially due to investor concerns surrounding possible interest rate cuts by the Federal Reserve. While Bitcoin and Ethereum products experienced large outflows, products focused on multiple cryptocurrencies saw unexpected inflows, signaling a buying opportunity for some investors. Altcoins such as Solana, Litecoin, XRP, and Chainlink have also received inflows, despite the overall market downturn. It remains to be seen how these trends will continue to evolve in the coming weeks and months.
