Simply put
- BlackRock’s Bitcoin and Ethereum funds experienced a combined loss of $876 million due to market volatility.
- The likelihood of a Federal Reserve rate cut in December decreased from 91.7% to 64.6%, fostering a negative outlook for cryptocurrencies.
- In contrast, Solana saw $118 million in weekly inflows and has accumulated $2.1 billion over the past nine weeks.
According to a recent report from CoinShares, Bitcoin and Ether funds have lost more than $1.17 billion within just a week.
BlackRock’s Bitcoin and Ethereum fund faced an outflow of $876 million last week, the highest among any issuer. In addition, another $438 million left the Fidelity Wise Original Bitcoin Fund.
The significant outflows from these funds are attributed to the prevailing negative sentiment in the market, largely due to volatility that ensued from the October 10th flash crash, and growing uncertainty surrounding the Federal Open Market Committee’s potential interest rate cuts in December.
As of Monday morning, futures trading indicated a 64.6% chance that the FOMC might reduce rates by 25 basis points at the December meeting, a stark contrast to the 91.7% odds traders projected just a month prior.
Jerome Powell, the Chairman of the Federal Reserve, cautioned last month that a rate cut in December was uncertain, suggesting the Fed may consider waiting for at least another cycle before making further cuts.
This shift presents a bearish scenario for crypto traders. Typically, cuts in Federal Reserve interest rates spur investments in riskier assets like stocks and cryptocurrencies.
The CoinShares report highlighted stark differences in trading volumes for ETP shares between U.S. and European exchanges. U.S. exchanges experienced $1.2 billion in selling, contributing heavily to negative sentiment, whereas Germany and Switzerland saw inflows of $41.3 million and $49.7 million, respectively.
James Butterfill, CoinShares’ head of research, noted that ETP volumes rose by $43 billion this week, spurred briefly by optimism regarding progress in resolving government shutdown concerns. Unfortunately, this optimism didn’t last, as new outflows were noted the following Friday.
Meanwhile, investments in Solana and other altcoin funds have remained encouraging.
“Altcoins are holding their ground well,” Butterfill remarked, noting Solana’s $118 million inflow last week and an impressive $2.1 billion over the last nine weeks. Other altcoins, such as HBAR and HyperLiquid, also experienced inflows of $26.8 million and $4.2 million, respectively.
The Bitwise Solana ETF has continued to attract interest since its launch on October 28th, while the Canary Capital HBAR ETF traded on the Nasdaq is being well-received, having already collected about $69 million in assets as of October 27.
Although there aren’t any spot ETFs currently available for HYPE, the native token for Hyperliquid Layer 1, 21Shares has launched exchange-traded products that are available on the SIX Swiss exchange since August.
