Last week, digital asset exchange-traded products (ETPs) and funds saw substantial outflows totaling $600 million, marking the largest withdrawal since March 22, as reported by CoinShares on June 17.
According to the “Weekly Asset Fund Flows” report, the majority of these outflows, amounting to $621 million, were from Bitcoin investment vehicles. Conversely, short Bitcoin funds experienced modest inflows of $1.8 million. The report attributed this capital flight to the Federal Reserve’s unexpectedly hawkish stance, signaling its intent to maintain high interest rates. This development likely prompted investors to retreat from assets with fixed supplies, such as Bitcoin.
Despite the challenges faced by Bitcoin, alternative cryptocurrencies, or altcoins, demonstrated resilience. Ether investment vehicles attracted $13.2 million in inflows, while LIDO and XRP investment products saw $2 million and $1.1 million, respectively. Other altcoins like BNB, Litecoin, Cardano, and Chainlink also recorded modest weekly inflows. Nevertheless, these gains were insufficient to prevent an overall decline in digital assets under management.
Despite the initial optimism surrounding the launch of Bitcoin exchange-traded funds (ETFs) in the United States, experts believe institutional participation remains at an early stage. Jenny Johnson, CEO of Franklin Templeton, emphasized that institutional adoption is still in its infancy. She anticipates a more robust wave of institutional interest and capital deployment in subsequent investment phases.
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