US inflation drives $400 million outflow from crypto funds
Date: 2025-02-18 Author: Oliver Abernathy Categories: BUSINESS
According to CoinShares, investors withdrew $415 million from crypto funds between February 8 and 14, a sharp contrast to the $1.3 billion inflow the previous week. This is the first outflow after a record 19 weeks of $29.4 billion in inflows, which was linked to the market reaction to Donald Trump's victory in the US presidential election.
Experts attribute the reversal to unexpectedly high inflation figures recorded in the consumer price index, as well as subsequent statements by Fed Chairman Jerome Powell to Congress, where he indicated that the regulator may maintain tight monetary policy longer than expected.
The biggest outflows came from Bitcoin-focused funds, which saw $430 million withdrawn. These products had previously seen $407 million inflows, signaling a sharp turnaround in investor sentiment. U.S. spot Bitcoin ETFs saw a net outflow of $157.8 million, ending a six-week streak of steady inflows.
Funds that allow short positions on Bitcoin lost $9.6 million, although they had previously recorded a small inflow of $0.1 million. Ethereum also came under pressure, with $7.2 million being withdrawn from its funds after a significant inflow of $783 million. Interest in investment products based on XRP weakened, which led to a decrease in inflows from $21.1 million to $8.5 million. Funds focused on Solana, Sui and Cardano, on the other hand, continued to attract capital, increasing inflows by $8.9 million, $6 million and $1.9 million, respectively. CryptoQuant specialists previously warned that a decrease in interest in risk assets could lead to a new bear cycle in the Bitcoin market. CoinDesk also noted that there is still strong demand among investors for call options with a strike price of $110,000 with an expiration date of March 28.
