Hawkish rhetoric from the Federal Reserve and last week’s CPI release catalyzed $415 million in outflows from digital asset investment products, according to CoinShares.
Per CoinShares’ weekly market report, digital asset investment products recorded negative flows for the first time after a 19-week streak of inflows.
Notably, these investment products had continued to see inflows even amid a broader market downturn for Bitcoin (BTC) and altcoins, triggered by trade tariffs and DeepSeek.
The $415 million in outflows for the week ending Feb. 14 followed renewed downside pressure on cryptocurrencies. Investor confidence appeared to take a hit amid higher-than-expected CPI data. Hawkish remarks from U.S. Federal Reserve Chair Jerome Powell also seemed to contribute to investors’ decisions to exit.
James Butterfill, head of research at CoinShares, noted in the weekly report that the outflows put a brake on “an unprecedented 19-week post-U.S. election inflow streak.” During this period, crypto exchange-traded products and other digital asset investment products amassed a notable $29.4 billion.
These inflows surpassed the $16 billion recorded in the first 19 weeks following the approval of U.S. spot exchange-traded funds, which the SEC greenlit in January 2024.
“We believe these outflows were triggered by the Congressional meeting with Fed Chair Jerome Powell, who signalled a more hawkish monetary policy stance, coupled with U.S. inflation data exceeding expectations,” Butterfill said.
Most of the outflows occurred in the U.S., where $464 million exited, while other regions defied the Fed and CPI data news. Germany, Switzerland, and Canada all recorded inflows of $21 million, $12.5 million, and $10.2 million, respectively.
Bitcoin saw the largest outflows, with $430 million exiting the asset. Short-Bitcoin products also registered negative flows, totaling $9.6 million. Meanwhile, Ethereum recorded $7 million in outflows.
Interestingly, Solana led with the most inflows, totaling $8.9 million, followed by XRP at $8.5 million. Sui also recorded inflows of $6 million. Developments around spot ETF applications buoyed both SOL and XRP.