Digital asset investment products (Bitcoin spot ETFs) experienced a significant reversal of fortune last week, with CoinShares reporting a total of $600 million in outflows, according to their latest report. This shift is attributed to the recent Federal Open Market Committee (FOMC) meeting, which took a more hawkish stance than anticipated by investors.

Bitcoin Spot ETFs Take a Hit

The majority of the outflows came from US Bitcoin spot ETFs. Grayscale’s GBTC experienced the most significant outflow, with a staggering $274.3 million leaving the fund. Ark Invest’s ARKB and Fidelity’s FBTC followed suit, witnessing net outflows of $149.7 million and $146.3 million, respectively.

While other Bitcoin spot ETFs were in a bloodbath, BlackRock’s IBIT stood out as the lone bright spot, recording inflows of $41.6 million last week. After last week’s net outflows, total net inflows in Bitcoin spot ETFs since inception dropped to $15.1 billion.

This marks a sharp reversal from the preceding 19 days, during which Bitcoin spot ETFs brought in a staggering $4 billion. The positive streak suddenly ended last Monday, with the first wave of outflows totaling $64.9 million. The FOMC meeting further intensified the trend, with outflows reaching a daily average of $200 million during the critical three-day period.

BTC Leads the Outflow Charge

Bitcoin itself hit hardest of the investor exit, with outflows exclusively targeting the leading cryptocurrency and totaling $621 million. This sentiment shift is further supported by the $1.8 million in inflows registered for short Bitcoin positions. Consequently, the price of Bitcoin ended the week a notable 7% lower.

James Butterfill stated in volume 187 of Digital Asset Fund Flows Weekly Rport that due to the outflows and recent drop in price the total assets under management (AuM) fall from above US$100bn to US$94bn during the week.

Trading volumes also dipped significantly, dropping to $11 billion compared to the year’s average of $22 billion. Despite the decline, it still remains well above the $2 billion weekly average observed in 2023.

Global Outflows but a Glimmer of Hope in Germany

The United States emerged as the epicenter of the outflow trend, accounting for the majority, at $565 million. However, the negative sentiment wasn’t geographically constrained. Canada, Switzerland, and Sweden also saw their share of outflows, amounting to $15 million, $24 million, and $15 million, respectively. Bucking the trend, Germany defied the outflow wave and registered inflows of $17 million.

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