Digital asset fund flows | September 2nd 2024

Stronger macro data prompts a downturn in sentiment with US$305m outflows

• Digital asset investment products saw outflows totalling US$305m last week, with widespread negative sentiment evident across various providers and regions.

• The negative sentiment was focussed on Bitcoin, seeing US$319m in outflows. Short bitcoin investment products saw a second consecutive week of inflows totalling US$4.4m.

• Ethereum saw US$5.7m outflows, while trading volumes stagnated, reaching only 15% of the levels seen during the US ETF launch week.

Digital asset investment products saw outflows totalling US$305m last week, with widespread negative sentiment evident across various providers and regions. We believe this was driven by stronger-than-expected economic data in the US, which has diminished the likelihood of a 50-basis point interest rate cut. We continue to expect the asset class to become increasingly sensitive to interest rate expectations as the FED gets closer to a pivot.

Regionally, the US saw outflows totalling US$318m, with Germany and Sweden seeing smaller outflows totalling US$7.3m and US$4.3m respectively. Switzerland and Canada saw minor inflows totalling US$5.5m and US$13.2m respectively.

The negative sentiment was focussed on Bitcoin, seeing US$319m in outflows. Short bitcoin investment products saw a second consecutive week of inflows totalling US$4.4m, the largest since March this year.

Ethereum saw US$5.7m outflows. while trading volumes stagnated, reaching only 15% of the levels seen during the US ETF launch week, comparable to the volume levels observed before the launches. Conversely, Solana saw US$7.6m of inflows.

Blockchain equities bucked the trend, seeing US$11m inflows, notably into Bitcoin miner specific investment products.

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