First Major Bitcoin Outflow in 5 Months: $430M Leaves as Fed Signals Caution
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- Bitcoin saw a $430M outflow due to Fed uncertainty, marking its first major withdrawal in five months.
- Despite Bitcoin’s decline, altcoins like SOL, XRP, and SUI remain resilient, while blockchain equities gain traction.
Investment products tied to Bitcoin and other digital assets saw a significant outflow of $415 million last week, marking the first major withdrawal in nearly five months after continuous inflows. This shift suggests a turning point in the crypto market.
However, as previously reported by CNF, this outflow could lead to massive inflows into other cryptocurrencies, such as Ethereum. This development follows Federal Reserve Chair Jerome Powell’s latest comments signaling a more cautious approach to interest rates, coupled with higher-than-expected inflation data. Investors, wary of prolonged economic uncertainty, appear to be taking a step back from Bitcoin.
Bitcoin Leads Outflows as Investors Pull Back
Bitcoin bore the brunt of the sell-off, losing $430 million in investments over the week. Notably, there was no corresponding increase in short positions against BTC—suggesting that rather than betting on a price drop, investors are simply withdrawing funds. According to the Digital Asset Fund Flows Weekly Report:
Bitcoin, highly sensitive to interest rate expectations, bore the brunt of investor outflows, totaling $430M last week. Interestingly, there were no corresponding inflows into short-Bitcoin products, which instead saw outflows of $9.6M.
Meanwhile, altcoins held their ground, with Solana (SOL) recording $8.9 million in inflows, followed closely by XRP at $8.5 million and Sui (SUI) with $6 million. This indicates that despite Bitcoin’s turbulence, certain altcoins remain attractive to investors seeking diversification in the crypto market.
Blockchain Equities Defy the Trend
While crypto investment products saw redemptions, blockchain-focused equities continued to gain traction. These stocks saw inflows of $20.8 million last week, bringing the sector’s total year-to-date inflows to $220 million.
This suggests that some investors still see long-term growth potential in blockchain technology, even as macroeconomic conditions challenge digital assets.
Bitcoin Faces Pressure Amid Fed Uncertainty
The recent outflows highlight the market’s sensitivity to economic signals, particularly from the Federal Reserve. Powell’s stance suggests that rate cuts may be delayed, which could impact liquidity flows into risk assets like Bitcoin. If macroeconomic uncertainty persists, Bitcoin could face continued volatility in the coming months.
As of now, Bitcoin is trading at approximately $96,225, down 0.04% in the past 24 hours and 1.47% in the past week. See BTC price chart below. Investors remain cautious, closely watching for further Fed guidance and economic indicators that could shape Bitcoin’s next move.
