Crypto funds record $454 million outflows as Fed rate-cut odds fade

Beincrypto reports crypto funds posted $454 million in outflows last week as odds of a March Federal Reserve rate cut collapsed.

According to CoinShares data, the outflows followed a four-day streak totaling $1.3 billion and nearly erased early-year inflows of $1.5 billion; Friday, January 2 began the year with $671 million flowing into crypto funds. Regionally, the US led withdrawals with $569 million. Bitcoin accounted for $405 million of exits, Ethereum $116 million, multi-asset products $21 million, short-Bitcoin products saw $9.2 million leave, and smaller outflows hit Binance ($3.7 million) and Aave ($1.7 million).

The report linked the sell-off to diminishing Fed rate-cut prospects after recent macro data, with the CME FedWatch Tool showing about a 5% chance of a March cut. Despite broad weakness, investors rotated into select altcoins, with XRP attracting $45.8 million, Solana $32.8 million and Sui $7.6 million, reflecting a shift toward high-conviction alternatives.

The CoinShares report described the $454 million pullback as not a collapse but a momentary recalibration, saying investors are adjusting positions in response to macroeconomic signals while continuing to favor high-conviction altcoins over Bitcoin.

Key Topics

Crypto, Coinshares, Federal Reserve, Bitcoin, Ethereum, Xrp