Crypto Funds See $1.3B in Outflows for Second Week But Signs of a Recovery Emerge

Core Insights - Crypto investment products experienced significant outflows totaling $1.17 billion for the second consecutive week, indicating ongoing investor withdrawal from the market [1][8] - The outflows are attributed to rising unease in financial markets, exacerbated by a prolonged U.S. government shutdown and uncertainty surrounding the Federal Reserve's next rate cut [2][5] - Bitcoin and Ethereum were the primary contributors to the outflows, with Bitcoin products seeing $932 million and Ethereum products $438 million in losses [3][8] - Despite the overall negative sentiment, Solana investment products stood out with inflows of $118 million, marking a total of over $2.1 billion in inflows over nine weeks [4][9] Market Context - The ongoing U.S. government shutdown has halted the release of critical economic indicators, leaving the Federal Reserve to make decisions without essential data [5] - The market's volatility has been compounded by a lack of fresh economic data, which typically guides monetary policy decisions [5] - Initial optimism regarding potential rate cuts was dampened by hawkish comments from Fed Chair Jerome Powell, leading to further outflows in digital asset markets [6] Investment Trends - Short Bitcoin ETPs were among the few products to attract inflows, receiving $11.8 million, the highest weekly total since May 2025, indicating a shift in investor strategy amid market uncertainty [4]