CoinShares wrote, “What has pushed Bitcoin into a “crypto winter” over the last six months can by and large be explained as a direct result of an increasingly hawkish rhetoric from the US Federal Reserve.”
According to CoinShares, institutional investors offloaded $101.5 million worth of digital asset products last week in ‘anticipation of hawkish monetary policy from the U.S. Federal Reserve.
US inflation hit 8.6% year-on-year in late May, marking a return to levels not seen since 1981. As a result, the market expects the Fed to take substantial steps to control inflation, with some traders pricing in three more 0.5% rate hikes by October.
According to the latest edition of CoinShares’ weekly Digital Asset Fund Flows report, outflows between June 6 and June 10 were primarily driven by US investors at $ 98 million, compared to just $ 2 million in Europe.
The top two assets of Crypto, the products providing exposure to Bitcoin (BTC) and Ethereum (ETH) are responsible for almost all outflows at $ 56.8 million and $ 40.7 million per piece. The month-to-date figures also paint a grim picture of TC 91.1 million worth of outflows for BTC products and $ 72.3 million worth of outflows for ETH products.
“What has pushed Bitcoin into a “crypto winter” over the last six months can by and large be explained as a direct result of an increasingly hawkish rhetoric from the US Federal Reserve.”
Although CoinShares suggests that Bitcoin has been pushed into the crypto winter, year-to-date (YTD) flows for BTC investment products still stand at 450.8 million. By comparison, funds offering exposure to ETH have seen huge YTD outflows of $ 386.5 million, indicating that sentiment among institutional investors is still largely in favour of digital gold. The report also highlighted that the total assets under management (AUM) for Ether funds have “fallen from its peak of US$23bn in November 2021 to US$8.7bn” as of last week.
Significantly, it appears that institutional investors offloaded their BTC and ETH products and both assets before the recent price killings.
Between June 6 and June 10, BTC and ETH prices fell 4.7% and 5.9%, respectively, according to data from CoinGecko. However, since June 11, BTC and ETH have declined by about 25.7% and 33.2%, respectively.
In addition to BTC and ETH outflows, multi-asset funds saw outflows of $ 4.7 million, and short bitcoin products posted a low outflow of $ 200,000. At the same time, investors were “steered clear of adding to altcoin positions.”
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