Largest Outflows in Crypto ETFs Since Mid-March
The recent Fed policy update had a significant impact on the cryptocurrency market, resulting in a massive $600 million outflow from crypto exchange funds, according to CoinShares. This marks the largest outflow since mid-March, when $1 billion left the funds.
The decision by the Federal Reserve to only cut interest rates once this year, rather than twice, likely contributed to the outflow. Investors were expecting a more dovish stance, and the strict tone took the market by surprise, leading to a fall in cryptocurrency prices.
The impact was particularly pronounced for Bitcoin ETFs, which saw a loss of $621 million. The majority of this, $580.6 million, came from spot ETFs, while bitcoin futures-based ETFs accounted for the rest.
Grayscale’s GBTC, a well-known ETF, led the decline, losing a total of $273 million. Fidelity and ARK Invest also saw significant losses, losing $146 million and $150 million, respectively.
In a surprising twist, ETFs shorting bitcoin saw a $1.8 million increase, indicating that more traders may expect the price to fall further.
On the other hand, altcoin funds, such as those focused on Ethereum, saw a resurgence, growing by $13.1 million. Other altcoins, such as Ripple’s XRP, also gained traction, rising by $1.1 million. Notably, only the solana (SOL) and a multi-asset fund saw losses.
As the market continues to adapt to the Fed’s guidance, investors will be keenly observing the next moves, waiting for signals on the future trajectory of the crypto market.