On Monday, the cryptocurrency investment firm announced that due to losses of $1.7 billion tracked by Coinshares, the historic bleeding of digital asset investment products has extended into its fifth week.
Exchange-traded products hold Bitcoin, Ethereum, and Solana, according to a report by Coinshares.
As President Donald Trump’s tariffs continue to drive trade tensions and inflation concerns, the report indicated that Bitcoin funds have been severely impacted. Last week, investors withdrew $978 million from Bitcoin funds as asset prices fell to a four-month low of $77,000.
Since then, Bitcoin prices have recovered to $83,000, but the “significant resistance” at last week’s low suggests that more pain lies ahead, Coinshares Research’s James Butterfill told Decrypt.
Butterfill stated, “I think we are close to the bottom.” He added that the rate of outflows may soon weaken. “It can be said that this is still happening, but we may be nearly at the bearish peak.”
On Friday, the latest consumer survey from the University of Michigan showed sentiment falling to its lowest level since November 2022 amid Trump’s erratic tariff approach.
Butterfill suggested that the deterioration of consumer sentiment in the U.S. could prompt the Federal Reserve to cut interest rates soon, as borrowing becomes cheaper.
After leaning towards “extreme fear” with a value of 20 last week, the Fear and Greed Index, which measures investor sentiment, has since rebounded to “fear” or a value of 32 as of Monday morning Eastern Time.
Predictive market traders foresee an 80% chance that the index will surpass 30 on Tuesday. (Disclosure: numerous Decrypt parent company, Dastan.)
The U.S. central bank will hold its latest policy meeting this week. While officials are widely expected to keep interest rates unchanged, the Federal Reserve will release a series of updated forecasts regarding key indicators, such as employment and inflation.
Last week’s inflation numbers were soft, as measured by the Consumer Price Index. However, following Thursday’s Federal Reserve meeting, the Fed prefers the Personal Consumption Expenditures (PCE) Index for updates.
Edited by James Rubin
