“By and large, what has pushed Bitcoin into a ‘crypto winter’ over the past six months can be explained as a direct result of increasingly aggressive rhetoric from the US Federal Reserve,” writes CoinShares.
According to CoinShares, institutional investors offloaded $101.5 million worth of digital assets from the Federal Reserve last week in “anticipation of tightening monetary policy.”
At the end of May, US inflation reached 8.6% yoy, returning to levels not seen since 1981. three more rate hikes of 0.5% through October.
According to the latest edition of CoinShares’ weekly Digital Asset Fund Flows report, outflows between June 6 and June 10 were primarily from US investors of $98 million, while Europe accounted for just $2 million.
Products that provide access to the two main crypto assets, Bitcoin (BTC) and Ether (ETH), accounted for almost all of the $56.8 million and $40.7 million outflows. The numbers for the month also paint a dismal figure of $91.1 million churn for BTC products and $72.3 million total churn for ETH products:
“By and large, what has pushed Bitcoin into a ‘crypto winter’ over the past six months can be explained as a direct result of increasingly aggressive rhetoric from the US Federal Reserve.”
While CoinShares has hinted that Bitcoin has entered a crypto winter, YTD (YTD) inflows for BTC investment products are still $450.8 million. In comparison, funds that provide access to ETH have seen a significant outflow of $386.5 million since the start of the year, suggesting that sentiment among institutional investors is still largely in favor of digital gold.
The report also highlights that total assets under management (AUM) for Ethereum funds “fell from a peak of $23 billion in November 2021 to $8.7 billion in the last week.”
Institutional investors in particular got rid of their BTC and ETH products before much of the recent price carnage happened in both assets.
Related: Bitcoin price falls to its lowest level since May as the Ethereum market records an 18.4% loss
According to data from CoinGecko, between June 6 and June 10, the price of BTC and ETH fell by 4.7% and 5.9%, respectively. Since June 11, however, BTC and ETH are down around 25.7% and 33.2%, respectively.
In addition to the outflow of BTC and ETH, multi-asset funds showed an outflow of $4.7 million, while short bitcoin products showed a minimum outflow of $200,000. At the same time, “investors also avoided increasing positions in altcoins.”
Asset Streams: CoinShares