The FOMC's hawkish stance triggered a massive outflow of funds from Bitcoin: $621 million was lost from investment products

The digital asset market experienced significant outflows after the Federal Open Market Committee (FOMC)’s hawkish stance exceeded market expectations.

The FOMC's hawkish stance forced investors to reduce their positions in fixed supply assets, particularly Bitcoin, leading to post-meeting outflows from digital asset investment products totaling $600 million, the largest weekly outflow since March 22, 2024 Capital outflow.

Additionally, recent price declines have further fueled the bearish sentiment, as evidenced by a decline in total assets under management (AuM), which dropped from over $100 billion to $94 billion this week.

Bitcoin outflows and market diversificationTrend

According to CoinShares’ latest Digital Asset Fund Flow Weekly Report, all outflows are concentrated on Bitcoin, with the cryptocurrency’s outflows reaching $621 million.

The outflow of funds not only highlighted the market's bearish sentiment towards Bitcoin, but also prompted an inflow of US$1.8 million into Bitcoin short investment products, indicating that investors expected Bitcoin prices to fall further. This sentiment echoes Bitcoin’s recent price performance, adding to market uncertainty.

In stark contrast to Bitcoin, Ethereum-based investment products showed inflows, reaching $13.1 million. The altcoin market is not far behind, with LIDO and XRP attracting $2 million and $1.1 million in inflows respectively. Additionally, Litecoin and Chainlink-related investment products attracted $800,000 each, while Cardano saw inflows of $700,000.

While the altcoin market as a whole has shown inflows, Solana has seen $200,000 in outflows over the past week, which may reflect the market’s different assessments and expectations of different cryptocurrencies.

Although the market remains optimistic about altcoin investment products, overall trading volume is low, with $11 billion in trading volume this week, well below this year's weekly average volume of $22 billion. However, compared to last year's level of $2 billion per week, this still shows the growth and maturity of the market.

Amid market volatility, digital asset exchange-traded products (ETPs) have shown stability, maintaining a 31% volume share among trusted exchanges globally. The stability of this ratio may provide investors with confidence that long-term interest in digital assets remains.

Global regional capital flowsAnalysis

In the observation of global regional capital flows, the United States became the country with the largest capital outflows this week, with outflows amounting to US$165 million. This significant outflow reflects market concerns about current economic conditions and monetary policy, as well as investors' reassessment of risk assets.

Following the United States, Switzerland also experienced significant outflows, amounting to $23.7 million. Canada and Sweden each recorded $15 million in outflows, which may point to a broader regional trend of investors withdrawing their investment from digital assets in these regions.

While outflows from Hong Kong were relatively small at just $1.3 million, they still showed that even Asia's financial center is not immune to negative sentiment in global markets.

In contrast to the above-mentioned countries, Germany showed a trend of financial inflows, amounting to $17.4 million. This phenomenon may indicate that the German market is more receptive to cryptocurrencies and other digital assets, or that investors believe that the German market offers better value and opportunities.

Australia and Brazil also recorded inflows of $1.7 million and $0.7 million respectively. Positive inflows into these countries likely reflect investor confidence in the economic potential of these regions, as well as optimism about the long-term growth of digital assets.

in conclusion

The outflow of Bitcoin funds triggered by the FOMC's hawkish stance marks an important turning point in the digital asset market. Investors’ diversification strategies and re-evaluation of the potential of different cryptocurrencies indicate that the market is developing in a more mature and diversified direction. Despite the short-term challenges of declining trading volumes, the market's long-term growth trends and continued investor interest remain evident.

At the same time, regional differences in global capital flows indicate that market sentiment and investment decisions are significantly affected by regional economic environments and policy expectations. However, inflows into Germany, Australia, and Brazil reflect investor optimism about the market potential in these regions and confidence in the long-term value of digital assets.

Looking to the future, as the market adapts to FOMC policies and continues to innovate in the cryptocurrency field, the digital asset market is expected to continue to maintain its attractiveness and vitality, providing investors with abundant opportunities and challenges.

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