Cryptocurrency investment funds experienced a significant outflow last week, marking the largest since March, following the recent FOMC meeting. A report by CoinShares on June 17 revealed that digital asset investment products saw a total outflow of $600 million. This marked the highest outflow since March 22, 2024.
The report attributed this market action to a more aggressive than expected FOMC meeting, prompting investors to reduce their exposure to fixed supply assets. As a result, total assets under management (AuM) fell from over $100 billion to $94 billion during the week due to the outflows and recent price sell-off.
Despite trading volumes remaining lower at $11 billion for the week compared to this year’s weekly average of $22 billion, digital asset ETPs continued to hold a steady 31% of global trading volumes on reputable exchanges, as stated by CoinShares Head of Research, James Butterfill, in the report.
In a significant decision impacting the financial market, the Federal Reserve (Fed) opted to keep interest rates stable between 5.25% and 5.50%, a level unseen for 23 years. This decision was reached at the end of a two-day monetary policy meeting, signifying a moment of stability since July 2023.
Analysts were surprised by the revision in the number of expected rate cuts for the year, with initial expectations of three reductions now adjusted to just one. The delicate balance in projections was evident as eight Fed officials projected two cuts, while seven saw the possibility of only one. Interestingly, four authorities do not anticipate any rate reductions for the year.
In a recent development that has piqued the interest of economists and investors, the latest report from the US Bureau of Labor Statistics indicated a noticeable slowdown in inflation during May. The Consumer Price Index (CPI) remained stable compared to the previous month, with an annual increase of 3.3% – a slower pace than the 0.3% increase in April and the 3.4% year-on-year growth.
Please note that the views and opinions expressed in this article are for informational purposes only and do not constitute financial or investment advice. Investing in cryptocurrencies involves a risk of financial loss.
