Bitcoin funds saw outflows of USD $600 million after FED announcement: CoinShares – DiarioBitcoin
By Hannah Perez
Investors in Bitcoin-based products withdrew $600 million last week after the US FED reiterated its hardening stance and showed little flexibility in cutting rates.
***
- US Interest Rate Announcement Impacts Bitcoin Investment Products
- Bitcoin Spot ETFs Faced Nearly $590 Million Outflows Last Week
- Bitcoin slipped below $66,000 after the FED meeting, and remains lower
The latest announcement by the US Federal Reserve (FED) to keep benchmark interest rates unchanged for the seventh consecutive period has generated bearish pressure on the cryptocurrency market.
Last Wednesday, US central bank officials confirmed that they are not yet prepared to cut benchmark rates as economic indicators show signs of persistent inflation.
Bitcoin (BTC) slid towards the $69,000 area and has remained below $67,000 since then, amid a widespread bearish trend for the rest of the digital currency market.
This discouraging outlook has also impacted the investment products of Bitcoinincluding exchange-traded funds (ETFs) based on Bitcoin spot in the U.S., which last week alone saw combined net outflows of $580.6 million for the first time in five weeks, according to a report from CoinShares.
Impact of the FED meeting on ETFs Bitcoin
The ETF converted from GrasycaleGBTC, led in terms of outflows with USD $274 million in the week while IBIT of BlackRock It was the only one that generated net inflows during the period, attracting USD $41.6 million. Total net inflows into the ETFs since they began trading in January now stand at $15.1 billion.
The 11 ETFs of Bitcoin US spot markets racked up their longest streak of 18 consecutive inflow sessions between May and June, generating more than $4 billion in net inflows. But the race ended last Monday when the funds recorded outflows of almost $65 million. Since then, departures have increased.
The breaking of the four-week streak of capital inflows coincided with labor data in the US, which showed a large addition of jobs in the economy, above what was expected.
The ETFs of Bitcoin Americans recorded their biggest outflow in more than a month on June 13, a day after the US Consumer Price Index (CPI) report provided few signs of inflation receding for the year. That same day, the FED’s Federal Open Market Committee (FOMC) opted to keep rates unchanged.
Market participants have been expecting a series of interest rate cuts, a move that is expected to provide relief to risky assets. However, FED officials’ outlook now calls for only a 25 basis point rate cut this year. The reference range remains between 5.25% and 5.50%.
Total outflows of USD $600 million in one week
The figure amounts to USD $600 million when accounting for joint outflows for cryptocurrency investment products internationally, noted the administrator, who cited the FOMC meeting as the main factor in the withdrawals. These are the largest departures since March 22, when similar circumstances were seen, they detailed.
“This occurred under similar circumstances: a period of significant inflows followed by a more hawkish-than-expected FOMC meeting, leading investors to reduce their exposure to fixed supply assets“reads the report CoinShares.
“These outflows and the recent price sell-off caused total assets under management (AUM) to fall from over $100 billion to $94 billion over the week.“, continued the analysts.
The outflows were entirely focused on Bitcoin, with outflows of $621 million. The pessimism also led to inflows of $1.8 million into short positions in Bitcoin.
Bitcoin (BTC) fell to a multi-week low of $65,100 on Friday. At the time of publication, its price is around USD $65,550 with a loss of 1.5% on the day and 5.4% on the week, according to data from CoinMarketCap.
Article by Hannah Estefanía Pérez / DailyBitcoin
Picture of Unsplash
WARNING: This is an informative article. DiarioBitcoin is a media outlet, it does not promote, endorse or recommend any particular investment. It is worth noting that investments in cryptoassets are not regulated in some countries. They may not be suitable for retail investors as the entire amount invested could be lost. Check the laws of your country before investing.
