Vitalij Sova
Cryptocurrency-focused funds logged outflows for the second straight week as traders braced for the latest Federal Reserve interest-rate decision, according to a report by CoinShares dated Tuesday.
For the week ended April 28, digital asset investment products saw outflows of $72M, “in what we believe is a reaction to the likeliness of further interest rate hikes by the US Federal Reserve,” the report said. That’s up from the outflows of $30M recorded in the prior week.
The Federal Open Market Committee’s two-day monetary-policy meeting started Tuesday and it’s largely expected to lift its benchmark rate by another 25 basis points, bringing the target range to 5.0%-5.25%.
Since the Fed commenced its tightening cycle in March 2022, crypto prices have taken a hit, with bitcoin (BTC-USD) down 36.9% and ethereum (ETH-USD) off 38.5%. Over the last week, BTC and ETH slid 1.5% and 2.2%, respectively.
Last week, bitcoin (BTC-USD) experienced the bulk of outflows, totaling $46M, while short-bitcoin products garnered the largest capital flight since December 2022. Ether (ETH-USD), too, saw outflows of $19M, marking the largest weekly outflows since its Merge last September.
“Volumes remain subdued for the broader crypto market (50% less than year average) while ETP (exchange-traded product) investment product volumes at US$1.7bn for the week are 16% above the year average,” CoinShares pointed out.
