TLDR
- Crypto funds recorded $223 million in outflows last week, ending a 15-week streak of consistent inflows.
- The Federal Reserve’s hawkish stance and strong US economic data triggered a shift in investor sentiment.
- Bitcoin funds led the decline with $404 million in outflows as August began with historical underperformance.
- Ether funds defied the trend and posted $133 million in inflows for the fifteenth consecutive week.
- Altcoins such as XRP, Solana, and Sui also attracted positive inflows despite broader market pullbacks.
Crypto funds recorded $223 million in outflows last week, halting a 15-week run of consistent inflows. This reversal followed the Federal Reserve’s hawkish tone during the FOMC meeting and stronger-than-expected US economic data. Investors reacted swiftly, shifting momentum from early-week gains to mid-week withdrawals.
The week started strong, with $883 million flowing into global crypto funds, driven by rising institutional activity and anticipation of lower rates. However, investor sentiment reversed after Fed Chair Jerome Powell signaled delays in interest rate cuts. As a result, crypto fund performance faltered, reflecting a broader market recalibration.
Market participants responded by locking in profits after a 30-day inflow surge totaling $12.2 billion, or 50% of yearly inflows. Although momentum paused, analysts considered the move temporary, driven more by macroeconomic signals than structural weakness. The digital asset market stayed above $3.7 trillion, showing underlying resilience despite policy concerns.
Bitcoin Products See Sharpest Pullback as Congress Recess Nears
Bitcoin-focused crypto funds led the outflows with $404 million exiting last week alone, reflecting a quick shift in investor behavior. The decline aligned with August’s historic performance pattern, where Bitcoin’s average monthly return remains negative. Data from CoinGlass confirms a median August return of -7.49% for Bitcoin.
Bitcoin began in August under pressure, facing profit-taking and macroeconomic headwinds from the US Central Bank’s outlook. While short-term sentiment weakened, some analysts expected renewed demand when Congress resumes post-Labor Day. Fiscal uncertainty, historically favorable for Bitcoin, could reintroduce bullish momentum for digital assets.
The Federal Reserve’s stance reduced expectations of a September rate cut, pushing probabilities from 63% down to 40%. This pivot influenced traders to rebalance holdings in favor of lower-risk positions. Despite the pullback, Bitcoin remained central to institutional narratives and long-term asset strategies.
Ether Defies Trend with Continued Inflows Amid Crypto Funds Decline
Ether products diverged from the broader crypto funds outflow trend, recording $133 million in inflows for the fifteenth consecutive week. Strong investor confidence and stable price performance contributed to Ether’s continued appeal. Even with a late-week dip, funds maintained positive flows into ETH-focused ETPs.
The consistent interest in Ether reflected a robust outlook from both retail and institutional investors. Analysts linked this to Ethereum’s ecosystem upgrades and broader adoption of decentralized applications. With a solid inflow record, Ether held firm as a leading digital asset through turbulent macro conditions.
Crypto funds focused on Ether retained strength, contrasting Bitcoin’s sharp pullback and maintaining portfolio diversification across key digital assets. The divergence underscored growing investor preference for assets with stronger developer activity and technological progress. Ether’s outlook remains constructive amid fluctuating market sentiment.
Altcoins Register Positive Inflows Despite Broader Outflows
Despite the overall crypto funds outflow, several altcoins closed the week in positive territory, indicating selective investor appetite. XRP funds attracted $31.2 million, while Solana and Sui brought in $8.8 million and $5.8 million, respectively. These inflows signaled continued interest in high-utility and high-liquidity tokens.
Increased activity from large investors also shaped the altcoin market, with a whale reportedly acquiring 350 million XRP tokens. This accumulation coincided with technical indicators suggesting a potential XRP recovery toward $0.53, supported by Bollinger Band signals. XRP’s positioning in payments kept it in focus during volatility.
