Crypto Inflows Slow to $230M Amid Fed 'Hawkish Pause'

• Weekly inflows into crypto investment products totaled $230 million, marking the fourth consecutive week of positive growth.
• Market momentum slowed significantly from the previous week's $1.06 billion as investors reacted to Federal Reserve policy.
• Bitcoin led the market with nearly $220 million in gains, while Ethereum saw its three-week inflow streak come to an end.

Impact of Federal Reserve Policy

Investment sentiment shifted mid-week following the US Federal Open Market Committee (FOMC) meeting. According to CoinShares, the market interpreted the central bank's stance as a "hawkish pause," leading to a sharp reversal in fund flows. While the week started with strong momentum, $405 million exited the market immediately following the Fed's announcement. James Butterfill, head of research at CoinShares, noted that this policy shift was a more significant factor than ongoing geopolitical tensions in the Middle East.

Asset Performance and Trends

Bitcoin (BTC) dominated the weekly activity, accounting for $219.2 million in net inflows. This was supported by US spot Bitcoin ETFs, which saw $95.2 million in gains last week, extending their positive streak to four weeks and bringing their recent total to $2.2 billion. In contrast, Ethereum (ETH) products experienced a downturn, recording $27.5 million in outflows and breaking a three-week period of growth.

Other notable asset performances include:

• Solana (SOL): Recorded $17 million in inflows, marking its seventh consecutive week of gains for a total of $136 million.
• Chainlink (LINK): Netted $4.6 million in new investment.
• Hyperliquid (HYPE): Secured $4.5 million in weekly inflows.

Year-to-Date Market Outlook

The broader crypto ETP market currently holds $138 billion in total assets under management. Year-to-date, these products have attracted $1.4 billion in total inflows, with Bitcoin ETPs leading the category at $1.2 billion. However, the US spot Ether ETF sector continues to struggle, with $599 million in outflows since the start of the year. Despite the recent positive momentum for Bitcoin, spot ETFs for the premier cryptocurrency remain roughly $400 million underwater for the year so far due to heavy earlier outflows.