Cryptocurrency investment products recorded $360 million in outflows last week as investors reacted to US Federal Reserve Chairman Jerome Powell's cautious comments on future rate of interest cuts.
Despite Wednesday's rate cut, Powell's comment that one other rate cut in December is “not a given” coupled with the dearth of economic data as a result of the continuing government shutdown appears to have unsettled markets, CoinShares reported on Monday.
The biggest selling pressure got here from US markets, which saw outflows of $439 million, partially offset by modest inflows from Germany and Switzerland. Bitcoin exchange-traded funds (ETFs) saw the largest decline, with redemptions totaling $946 million.
Weekly crypto asset flows. Source: CoinShares
Even though Bitcoin funds bore the brunt of the outflows, not all assets followed suit. Solana stood out, attracting $421 million in inflows, the second largest on record, driven by demand for newly launched U.S. ETFs, bringing its year-to-date total to $3.3 billion.
Ethereum also recorded $57.6 million in inflows, although every day activity suggested mixed sentiment amongst investors.
The outflows got here after crypto products saw $921 million in inflows within the previous week, driven by lower-than-expected consumer price index (CPI) data released on October 24.
New Solana Stake ETF
Bitwise's latest Solana Staking ETF (BSOL) debuted last Tuesday with $222.8 million in starting capital, signaling strong institutional demand for Solana staking products.
BSOL offers investors direct exposure to Solana (SOL) with an estimated 7% annual return from on-chain staking rewards.
As of Friday, spot Solana ETFs recorded inflows for the fourth consecutive day, registering an inflow of $44.48 million.
Vincent Liu, chief investment officer at Kronos Research, told Cointelegraph the trend reflects growing interest in betting returns and ongoing “capital rotation” as traders take profits from recent rallies in Bitcoin (BTC) and Ether (ETH).
Although Solana ETF inflows have surged, SOL was trading at around $166 on the time of writing, down over 9% within the last 24 hours and down around 26% within the last 30 days, in keeping with data from CoinGecko.
