Bitcoin (BTC) Led Last Week's Crypto Investment Outflows, Seeing $643M in Negative Flows - Market Updates Bitcoin News

Crypto investment products saw outflows of $726 million last week, levels not seen since March. The US dominated the outflows, contributing $721 million in negative flows.

Crypto investment products saw outflows of $726 million last week, the highest since March, as traders and investors remained uneasy ahead of key US economic events this week and throughout September.

The outflows were led by the United States, which contributed $721 million in negative flows, as strong macroeconomic data from the previous week increased the likelihood of a 25 basis point (bps) interest rate cut by the US Federal Reserve, according to CoinShares.

However, daily outflows slowed later in the week as employment data fell short of expectations, leaving market opinions on a potential 50bp rate cut divided. The markets are now awaiting Tuesday’s Consumer Price Index (CPI) inflation report, with a 50bp cut more likely if inflation comes in below expectations, the report added.

“This negative sentiment was driven by stronger-than-expected macroeconomic data from the previous week, which increased the likelihood of a 25 bp interest rate cut by the US Federal Reserve,” CoinShares stated.

“However, daily outflows slowed later in the week as employment data fell short of expectations, leaving market opinions on a potential 50bp rate cut highly divided. The markets are now awaiting Tuesday’s Consumer Price Index (CP|) inflation report, with a 50bp cut more likely if inflation comes in below expectations.”

The CME Fed Watchtool showed a 55% probability of a 50 bps rate cut on Friday following the jobs report, compared to 45% for a 25 bps cut.

By Monday, however, the tool indicated a 75% probability of a 25 bps cut, with only a 25% chance of a 50 bps reduction.

Most traders are expecting a rate cut at the September 17-18 Federal Reserve meeting, but the size of the cut remains uncertain.

“The anticipation of a smaller rate cut at the September meeting is likely impacting the price of bitcoin. Some experts have warned that an interest rate cut might have an adverse effect on bitcoin,” CoinTelegraph reported.

Meanwhile, Bloomberg reported the longest streak of daily net outflows from US Bitcoin ETFs since their listing, with investors withdrawing nearly $1.2 billion over eight consecutive trading days leading up to September 6.

“The outflows mark a stark reversal from the inflows seen earlier this year, when traders piled into the funds amid a bitcoin price rally. The flows also come as institutions are showing less interest in the flagship cryptocurrency,” Bloomberg noted.

Institutional interest in Ethereum also waned this week, as Farside data shows almost zero flows for most Ethereum ETFs, while Grayscale reports negative flows.

Overall, crypto outflows were mainly driven by worsening macroeconomic data and anticipation of the upcoming inflation report and Federal Reserve meeting.

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