After 15 weeks of continuous inflows, cryptocurrency investment funds saw a reversal in sentiment, posting $223 million in outflows last week.
CoinShares’ latest report attributes the drop to investor reactions following a hawkish tone from the U.S. Federal Reserve during its recent FOMC meeting.
Although the week began with $883 million in inflows, the trend reversed sharply by mid-week.
“Given we have seen US$12.2bn net inflows over the last 30 days, representing 50% of inflows for the year so far, it is perhaps understandable to see what we believe to be minor profit taking,” CoinShares stated.
Bitcoin Funds Lead the Downtrend
Bitcoin investment products bore the brunt of the shift, registering $404 million in outflows — the largest among all cryptocurrencies tracked.
Bitcoin’s historical performance in August likely played a role in the pullback, with CoinGlass data showing a median return of -7.49% for the month.
The Federal Reserve’s hawkish messaging also reduced the odds of a rate cut in September from 63% to 40%, according to Cointelegraph.
This cooled broader risk appetite, contributing to the downturn in crypto sentiment.
Analysts Look to Post-Summer Catalysts
Despite the dip, some analysts remain optimistic about a potential turnaround in the coming months.
Matrixport, in a research note published Friday, suggested that Bitcoin could rally when the U.S. Congress reconvenes after Labor Day.
“Fiscal uncertainty has historically been a powerful tailwind for hard assets, and Bitcoin remains front and center in the narrative,” the note read.
Ether Funds Continue to Attract Capital
While Bitcoin faltered, Ether funds remained resilient.
ETH-based exchange-traded products (ETPs) recorded their 15th consecutive week of positive inflows, totaling $133 million.
CoinShares pointed to “robust positive sentiment for the asset” as a key reason behind Ether’s sustained popularity among institutional investors.
This diverging trend between Bitcoin and Ether underscores the shifting preferences within the crypto investment landscape.
Altcoins Show Mixed Results
Several altcoins also managed to stay in the green.
XRP-focused funds saw $31.2 million in inflows, while Solana and Sui brought in $8.8 million and $5.8 million, respectively.
These results indicate that while overall sentiment has cooled, select assets continue to attract niche investor interest.
Trump Tariffs Rattle Markets, but Crypto Holds Steady
Adding to market tensions, President Donald Trump signed an executive order last Thursday introducing reciprocal import tariffs of 15% to 41% on goods from 68 countries.
The decision triggered unease across global markets, though crypto markets remained largely stable.
Stella Zlatareva, dispatch editor at Nexo, said the digital asset space saw a “recalibration” rather than a breakdown.
“The digital asset market remains firmly above $3.7 trillion, anchored by structural flows, institutional conviction and the promise of clear US regulation,” she noted.
“Altcoin stability may gradually return,” Zlatareva added, suggesting that investors are still seeing long-term potential in the sector.