The cryptocurrency market experienced a significant setback last week, with digital asset investment products seeing a massive outflow of $726 million. This figure matches the largest outflow recorded earlier this year in March, highlighting the volatile nature of the crypto market.
The shift in investor sentiment comes amid uncertainty surrounding potential interest rate cuts by the Federal Reserve. According to a new report by CoinShares, the outflows were predominantly concentrated in the United States, accounting for $721 million of the total.
Bitcoin, the leading cryptocurrency, bore the brunt of the exodus, losing $643 million, while Ethereum, the second-largest cryptocurrency, saw an outflow of $98 million.
James Butterfill, Head of Research at CoinShares, attributed the negative sentiment to stronger-than-expected macroeconomic data from the previous week, which increased the likelihood of a 25 basis point interest rate cut by the U.S. Federal Reserve.
Interestingly, the report revealed a divergence in regional sentiment. While the U.S. and Canada experienced significant outflows, European markets, specifically Germany and Switzerland, showed resilience with inflows of $16.3 million and $3.2 million, respectively.
With investors increasingly looking for signs of stability in the crypto market, industry leaders will gather at Benzinga’s Future of Digital Assets event on November 19 to discuss these challenges and explore the next steps for the evolving crypto landscape.
