After experiencing the highest multi-week inflows in months, bitcoin investment products are facing huge withdrawals despite positive US economic indicators.
CoinShares said on Sept. 2 that “stronger-than-expected economic data” in the US drove $305 million in withdrawals from digital asset investment products last week.
The data reveals that US investors sold the most crypto investment products from Aug. 24 to Aug. 31, with outflows reaching $318 million.
Germany and Sweden saw lesser outflows of $7.3 million and $4.3 million. Switzerland and Canada experienced marginal inflows of $5.5 million and $13.2 million.
On Aug. 30, the US Commerce Department stated that the Personal Consumption Expenditures (PCE) price index rose 0.2% that month and 2.5% from previous year.
The US Federal Reserve, which is expected to cut interest rates for the first time in four years, favors the PCE as a measure of inflation since consumer spending drives economic development.
September market rate reduction were predicted when the news appeared. The PCE study suggested a 24 basis point decrease and reduced the likelihood of a 50 basis point cut.
According to CoinShares' recent analysis, “We continue to expect the asset class to become increasingly sensitive to interest rate expectations as the Fed gets closer to a pivot.”
At $319 million, Bitcoin-based financial products lost the most last week, according to CoinShares.
Short Bitcoin investment products had $4.4 million inflows for the second week in a row, the most since March 2024.
Fed’s ‘sugar high’ may boost Bitcoin – Arthur Hayes
Crypto investment products on Ethereum witnessed $5.7 million outflows, continuing the declining trend despite the US launch of Ethereum ETFs on July 23, 2024.
