The recent FOMC meeting had a significant impact on the digital assets market, leading to outflows of $600 million from investment products. This outflow, the largest since March 22, 2024, was driven by investors scaling back their exposure to fixed-supply assets due to a hawkish stance taken by the FOMC.
The majority of outflows were focused on Bitcoin, with $621 million in withdrawals recorded. This bearish sentiment surrounding Bitcoin also resulted in inflows of $1.8 million into short-bitcoin investment products, indicating a growing inclination to bet against the asset’s price rise. On the other hand, Ethereum-based investment products saw inflows of $13.1 million over the past week.
Altcoins also experienced some positive inflows during the same period. LIDO and XRP attracted $2 million and $1.1 million, respectively, while investment products for Litecoin and Chainlink received $0.8 million each. Cardano saw $0.7 million in inflows, while Solana experienced mild outflows of $0.2 million.
Despite the positive sentiment towards altcoin investment products, trading volume remained low at $11 billion for the week, compared to the $22 billion weekly average this year. However, this figure was still significantly higher than the $2 billion observed weekly last year. Digital asset exchange-traded products (ETPs) maintained a steady 31% share of global trading volumes on reputable exchanges.
In terms of regional distribution, the US saw the largest outflows for the week, totaling $165 million. Switzerland, Canada, and Sweden also experienced outflows of $23.7 million, $15 million, and $15 million, respectively. Hong Kong noted mild outflows of $1.3 million. On the other hand, Germany saw inflows of $17.4 million, followed by Australia with $1.7 million and Brazil with $0.7 million.
Overall, the FOMC meeting and subsequent market reactions have had a significant impact on the digital assets market, with Bitcoin outflows and shifting investor sentiment towards different altcoins. The evolving landscape of digital assets investment products highlights the importance of staying informed and adapting to market changes.