U.S. Bitcoin exchange-traded funds (ETFs) experienced significant outflows last week, totaling $946 million, led by the iShares Bitcoin Trust, which alone saw a loss of approximately $400 million. This trend reflects a broader reaction among investors to comments made by U.S. central bank Chair Jerome Powell regarding the potential for interest rate cuts in December. Despite a recent rate cut, Powell’s cautious remarks implied that further reductions were “not a foregone conclusion,” contributing to an atmosphere of uncertainty.
CoinShares, a digital asset manager, reported that total net outflows for all digital asset investment products were around $360 million for the week. According to James Butterfill, CoinShares’ Director of Research, the combination of Powell’s hawkish tone and the lack of significant U.S. economic data has left investors feeling unsettled. In contrast to the outflows from U.S. Bitcoin funds, ETFs from issuers in Germany and Switzerland attracted more than $30 million in new investments. Canadian and Australian funds also saw inflows, totaling $8.5 million and $7.2 million, respectively.
There was, however, a notable influx of capital into Solana ETFs, which gained $421 million in investments last week. This surge was largely fueled by the introduction of new U.S.-based funds, including the Bitwise Solana ETF, which had a strong debut on the Nasdaq under the ticker BSOL, amassing $105 million in assets under management within its first week. Another newcomer, the Rex-Osprey Solana Staking ETF, trading under the ticker SSK, reached the $100 million mark in assets after 12 trading days.
The overall crypto market faced turbulence, particularly due to the ongoing U.S. government shutdown, which has exceeded 33 days, marking the longest in U.S. history. The shutdown has resulted in a scarcity of U.S. economic data, further complicating the investment landscape. Market predictions have indicated a 97% likelihood that lawmakers will fail to resolve the shutdown situation within the immediate future.
Monday saw crypto markets experience a downturn, leading to the liquidation of over $1 billion in crypto contracts. Bitcoin and Ethereum were particularly affected, with closed contracts amounting to $312 million and $303 million, respectively. At the latest reporting, Bitcoin was priced at $107,463, reflecting a decline of 2.5% over the previous day, while Ethereum was trading at approximately $3,657.77, a decrease of about 5.1% since Sunday, according to data from CoinGecko.
