Key Points
- Last week saw a sharp reversal in crypto flows due to macroeconomic signals, leading to $940 million in outflows.
- Bitcoin (BTC) and Ethereum (ETH) experienced significant inflows and outflows, while altcoins like XRP (XRP) and Solana (SOL) saw positive inflows.
Macroeconomic factors triggered a significant shift in cryptocurrency flows last week. A total of $940 million in outflows negated the early inflows.
Digital Asset Flows
Digital asset investment products witnessed $48 million in net inflows. However, nearly $1 billion that flowed in earlier in the week was counterbalanced by $940 million in outflows. This was due to new economic data and hawkish Federal Reserve minutes that unsettled investors, as noted by James Butterfill, Head of Research at CoinShares.
Bitcoin (BTC) recorded $214 million in inflows but also experienced the most significant outflows among digital assets later in the week. Despite this, BTC remains the best-performing asset with $799 million in inflows year-to-date.
Performance of Other Cryptocurrencies
Ethereum (ETH) had a tough week with $256 million in outflows. Butterfill attributed this to the broader tech sell-off rather than Ethereum-specific issues. Meanwhile, Solana (SOL) remained robust, drawing $15 million in inflows.
XRP (XRP) brought in $41 million in inflows, influenced by political and legal factors. The inflows indicate increased optimism ahead of the Jan. 15 SEC appeal deadline.
Several alternative cryptocurrencies experienced inflows despite weak price performance. For example, Aave (AAVE), Stellar (XLM), and Polkadot (DOT) were notable, attracting $2.9 million, $2.7 million, and $1.6 million, respectively. According to Butterfill, these figures show that the post-U.S. election honeymoon is clearly over and that macroeconomic data is once again a key driver of asset prices.
