Powell’s hawkish tone leaves crypto investors in a 'state of limbo' amid $360M in weekly ETP outflows: CoinShares

Global crypto investment products managed by asset managers such as BlackRock, Bitwise, Fidelity, Grayscale, ProShares, and 21Shares witnessed net outflows of $360 million last week, according to CoinShares' data, sliding back from the prior week's $921 million in net inflows.

"Despite the recent U.S. interest rate cut , investors interpreted Fed Chair Jerome Powell's comments on the likelihood of another cut in December as 'not a foregone conclusion,'" CoinShares Head of Research James Butterfill wrote in a Monday report . "This hawkish tone, combined with a notable absence of key U.S. economic data releases, appears to have left investors in a state of limbo."

The negative sentiment was primarily felt in the U.S., Butterfill noted, with crypto funds in the region notching $435 million worth of net outflows. This was partially offset by respective net inflows of $32 million and $30.8 million into ETPs in Germany and Switzerland, while other regions witnessed more modest flows.

Last week, BTC and ETH fell 6.5% and 10.5%, respectively, according to The Block's price page , putting the final nail in the coffin for investors' "Uptober" dreams and breaking a streak of six straight years of October gains.

Bitcoin funds dominate outflows as Solana gets US ETF boost

Bitcoin-based ETPs were the only major crypto investment products to witness significant outflows, with $946 million exiting the funds last week. "We believe that, despite the recent interest rate cut, the hawkish interpretation of Jerome Powell's remarks weighed heavily on bitcoin prices, as it remains the digital asset most sensitive to monetary policy developments," Butterfill said.

The U.S. spot Bitcoin exchange-traded funds saw $799 million in net outflows alone, according to data compiled by The Block, led by $403.4 million exiting BlackRock's IBIT.

In contrast, Ethereum products managed net inflows of $57.6 million globally last week, with the U.S.-based spot Ethereum ETFs adding $16.1 million, again led by BlackRock's ETHA.

Meanwhile, Solana ETPs recorded inflows of $421 million globally last week — the second largest on record — driven by strong demand for the newly launched U.S. ETFs, and lifting year-to-date inflows to $3.3 billion.