Crypto products will post a cost of 726 million dollars due to volatility
Cryptocurrency investment products experienced another challenging week, with outflows reaching $726 million, according to CoinShares' latest report.
Following previously repeated weekly inflows, crypto investment products matched the largest set of outflows on record since March 2024, CoinShares head of research James Butterfill wrote in the latest “Digital Asset Fund Outflows Weekly Report” released on September 9.
As previously reported by CoinShares, crypto products saw weekly outflows between March 17 and March 23, shedding a total of $942 million.
Weekly crypto asset flows. Source: CoinShares
Last week, Bitcoin (BTC)-based crypto investment products saw a total of $643 million spent. Ether (ETH) saw a total of $98 million in withdrawals, while Solana (SOL) saw the highest inflows of any asset with a total of $6.2 million.
A possible 25-bp interest rate hike versus a 50-bp cut: The impact on the crypto market
The ongoing selling pressure is consistent with negative sentiment led by better-than-expected macroeconomic data in the United States last week, raising the possibility of a 25-basis-point (bp) interest rate cut.
Daily outflows later slowed amid weak US employment data, fueling speculation that the US Federal Reserve may opt for a 50 bp rate cut.
“The markets are now awaiting Tuesday's consumer price index inflation report, with a 50 bp cut more likely if inflation comes in below expectations,” Butterfill wrote.
According to 21Shares analyst Lena Eldib, the results of the US labor market served as a “moment of truth” for risky assets like Bitcoin.
The drop in prices is good for riskier assets, which have historically enjoyed an expansion of investor appetite as borrowing costs fall, Eldib told Cointelegraph, adding that other incentives could point to a potential crash for Bitcoin.
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One of these is global central bank liquidity, measured in M2. “Historically, Bitcoin tends to bottom out shortly before global M2 lows, followed by rapid price increases and often outpacing liquidity growth,” ElDeeb said.
Bitcoin price versus global liquidity (M2). Source: Bitcoin Magazine Pro
Coinbase posted its worst week of 2024 as crypto stocks tumbled
Apart from the large-scale selling of crypto products, the selling going on in crypto can also be seen in the crypto stock market.
According to CNBC, Coinbase (COIN) shares posted their worst week of 2024, with the stock falling to its lowest value since February. According to data from TradingView, COIN closed at $147 on September 6. The stock is down around 14%.
Coinbase price chart year by day. Source: TradingView
According to CNBC, several major Bitcoin mining companies ended the week with double-digit drops, led by CleanSpark's 24% decline.
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