Investor nerves over U.S. monetary policy drove the largest weekly withdrawals from digital-asset investment products since March, CoinShares reported Monday. This happened even as trading volumes in exchange-traded products (ETPs) jumped sharply, showing how polarised markets have become. Overall, digital asset funds saw $1.43 billion in outflows last week while ETP trading volumes surged to about $38 billion.
The pullback was led by Bitcoin, which accounted for roughly $1 billion of the outflows. Ethereum, by contrast, proved more resilient: it registered $440 million in weekly outflows but staged a mid-week recovery that left it month-to-date with roughly $2.5 billion of net inflows, versus about $1 billion net outflows for Bitcoin so far this month. It is a noteworthy rotation in investor demand. CoinShares notes that year-to-date inflows into Ethereum now represent about 26% of total assets under management in digital-asset products, compared to 11% for Bitcoin.
Jackson Hole and a Quick Mood Swing
Early in the week, growing pessimism that the Federal Reserve would remain hawkish pushed investors to the exits, producing roughly $2 billion of outflows at one point. Sentiment flipped after Federal Reserve Chair Jerome Powell’s address at the Jackson Hole symposium, widely read as more dovish than feared, which sparked $594 million of inflows later in the week. Powell’s remarks and the Fed’s published slides prompted markets to price in a higher probability of rate cuts, sending risk assets higher and weakening the dollar.
That emotional seesaw also showed up in prices: Bitcoin traded near $112k on Monday, off a short-term high above $116k earlier in the week, while Ethereum was trading in the $4.6k range after rallying sharply mid-week. The swings have been extreme; some crypto venues recorded brief, violent moves (including flash-sell pressure) that exacerbated intraday volatility.
Mixed Flows, Selective Buying
Flows into smaller tokens were uneven. CoinShares’ weeklies show inflows into XRP (+$25m), Solana (+$12m) and Cronos (+$4.4m), while projects like Sui (-$12.9m) and Ton (-$1.5m) experienced the biggest outflows among tracked altcoins. That pattern, selective accumulation of a handful of liquid altcoins while others see redemptions, matches the broader theme of rotation rather than broad-based selloffs.
Several forces favoured Ethereum: heavy institutional demand for Ethereum products (including ETF and ETP flows), optimism around post-Merge Ethereum technical upgrades, and rotation out of Bitcoin spot products into broader risk assets after Powell’s comments. Several market reports showed Ethereum-linked ETFs and products jumping in trading and briefly hitting multi-week highs as investors reacted to the Fed’s tone.
That institutional appetite helped limit Ethereum’s weekly outflows relative to Bitcoin and produced the month-to-date inflows headline in CoinShares’ data. The $38 billion in ETP trading volume reported by CoinShares, roughly 50% above this year’s average, shows investors are actively repositioning rather than simply hiding on the sidelines.
That activity increases liquidity but also magnifies short-term volatility, as large directional trades can push prices quickly when leveraged positions are present. CoinShares’ weekly snapshot illustrated exactly that: outsized flows on both sides of the ledger within days. The market will parse upcoming U.S. data, notably the PCE inflation figures and jobs releases, for confirmation that the Fed can or will cut rates.
If data disappoints, the risk-off phase could resume quickly. Last week’s $1.43 billion outflows show money can move quickly once macro fears take hold, but the sharp bounce after Powell’s Jackson Hole remarks also shows how rapidly that sentiment can reverse. For now, the story is one of active rotation, institutional dollars are shifting toward Ethereum and a handful of favored altcoins while Bitcoin sees intermittent profit-taking.
from Crypto News: Bitcoin, Ethereum & Price Data | BlockchainReporter https://ift.tt/ah0NPf3
via IFTTT
