Digital asset funds have experienced a second consecutive week of decline, recording $206 million in withdrawals from April 15-19, according to data from CoinShares, a digital asset investment firm. The outflows were primarily driven by Bitcoin (BTC) funds, which saw $192 million exiting the market ahead of the halving event. Additionally, Ether (ETH) investment products saw outflows of $34 million, marking their sixth consecutive week of negative flow.
Investment in blockchain equities has also been on the decline, with the sector experiencing its 11th consecutive week of outflows, totaling $9 million.
CoinShares suggests that the downward trend may be attributed to investors’ concerns about rising interest rates in the United States. This has made less risky financial instruments more appealing compared to volatile assets like cryptocurrencies.
The Federal Reserve had initially planned to ease its monetary policy in mid-2024, but recent inflation data have dampened those expectations. The Consumer Price Index for March showed a 3.5% increase, surpassing expectations for the third consecutive month. This indicates that lower interest rates may not be a reality until 2025. The current federal funds rate ranges between 5.25% and 5.50%.
Although trading volume for Bitcoin exchange-traded funds (ETFs) slightly declined to $18 billion over the week, the outflows from Bitcoin funds were not seen as an opportunity to short the cryptocurrency. CoinShares suggests that this trend indicates investors are moving away from volatility but are not necessarily expecting a crash in Bitcoin prices anytime soon. The report also notes that these outflows represent a lower percentage of total Bitcoin volumes, which continue to rise, compared to a month ago.
Inflows into Bitcoin ETFs have significantly slowed since reaching their peak in March. However, BlackRock’s iShares Bitcoin Trust (IBIT), the largest ETF in terms of assets managed, has maintained a steady level of investor interest this month, attracting $1.4 billion in positive flows as of April 19.
In other news, it has been reported that 1 in 6 new Base meme coins are scams, with 91% of them having vulnerabilities, according to a magazine.