$305M Outflow from Crypto Products Amid Robust US Economic Data

September 03, 2024 02:21 PM AEST | By Team Kalkine Media

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$305M Outflow from Crypto Products Amid Robust US Economic Data — Image source: shutterstock

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According to CoinShares' recent digital asset fund flows report, {cryptocurrency} related financial products have experienced significant outflows, influenced by recent US economic data. The report, published on September 2, indicates that digital asset products faced outflows totaling $305 million during the week of August 24 to August 31. This shift follows a period of substantial inflows and comes in response to stronger-than-expected economic indicators from the United States.

The US Commerce Department's report on August 30 highlighted a 0.2% month-over-month increase in the Personal Consumption Expenditures (PCE) price index, which also rose by 2.5% year-over-year. The PCE index is a key measure of inflation and is closely monitored by the US Federal Reserve, which is anticipated to make its first interest rate reduction in over four years. This economic data suggests a potential interest rate cut in September, impacting financial markets, including digital assets.

US financial products related to cryptocurrencies led global outflows, with a total of $318 million withdrawn during the specified week. Germany and Sweden also recorded smaller outflows, amounting to $7.3 million and $4.3 million respectively. Conversely, Switzerland and Canada experienced modest inflows, totaling $5.5 million and $13.2 million, respectively.

Among the various digital assets, Bitcoin-related financial products faced the largest withdrawals, with $319 million exiting the market. Short Bitcoin products, however, saw a consecutive week of inflows, totaling $4.4 million, marking the highest inflow since March 2024. Ethereum-related products also saw outflows of $5.7 million, despite the recent introduction of Ethereum exchange-traded funds (ETFs) in the US.

In contrast, blockchain equities saw inflows of $11 million, with notable interest in products linked to Bitcoin mining. The report underscores the growing sensitivity of cryptocurrency products to interest rate expectations and economic indicators, highlighting the impact of shifting economic conditions on this sector.

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