A historic bleed for digital asset investment products stretched into its fifth week, as products tracked by CoinShares lost $1.7 billion, the crypto investment firm said on Monday.
Exchange-traded products holding Bitcoin, Ethereum, and Solana are now facing their worst stretch of outflows on record, totaling $6.4 billion since Feb. 7, CoinShares said in a report.
As President Donald Trump’s tariffs continued driving trade tensions and inflation concerns, Bitcoin funds were hit particularly hard, per CoinShares’ report. Investors yanked $978 million from Bitcoin funds last week as the asset’s price fell to a four-month low of $77,000.
Bitcoin’s price has since reclaimed $83,000, but “a lot of resistance” from last week’s low suggests more pain lies ahead, CoinShares Head of Research James Butterfill told Decrypt.
“I think we are close to the bottom,” Butterfill said, adding that the pace of outflows may soon weaken. “It’s to say that’s happened just yet, but we might be close to peak bearishness.”
On Friday, the University of Michigan’s latest consumer survey showed sentiment plunging to its lowest level since November 2022 amid Trump’s erratic tariff approach.
Butterfill suggested that deteriorating consumer sentiment in the U.S. may prompt the Federal Reserve to cut interest rates soon, buoying crypto prices as borrowing becomes cheaper.
After tilting toward “Extreme Fear,” or a value of 20 last week, the Fear and Greed Index, a measure of investor sentiment, has since climbed back to “Fear,” or a value of 32, as of Monday morning Eastern.
Prediction market traders on MYRIAD foresee an 80% chance that optimism will persist, and the index will be above 30 on Tuesday. (Disclosure: MYRIAD is owned by Decrypt’s parent company, DASTAN.)
The U.S. central bank will hold its latest policy meeting this week. While officials are widely expected to leave interest rates unchanged, the Fed will release a series of updated projections touching on key metrics like employment and inflation.
Last week’s inflation figures came in soft, as measured by the Consumer Price Index. However, the Fed’s preferred inflation gauge, the Personal Consumption Expenditures Index, won’t be updated until after the conclusion of the Fed’s meeting on Thursday.
Edited by James Rubin
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