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Nearly $ 100 million goes out of US cryptocurrencies pending hawkish monetary policy

Institutional investors loaded off $ 101.5 million worth of digital assets last week in anticipation of the US Federal Reserve’s hawkish monetary policy, according to CoinShares.

US inflation rates reached 8.6% year-on-year at the end of May, marking a return to levels not seen since 1981. As a result, the market expects the Fed to take significant steps to increase inflation, with some traders as prices in three further 0.5% interest rate increases by October.

According to the latest edition of CoinShares’ weekly Digital Asset Fund Flows report, outflows between June 6 and June 1[ads1]0 were primarily led by US investors to $ 98 million, while Europe accounted for only $ 2 million.

Products that offer exposure to crypto’s top two assets, Bitcoin (BTC) and Ethereum (ETH), accounted for almost all outflows of $ 56.8 million and $ 40.7 million each. The monthly figures also paint a grim figure for outflows worth $ 91.1 million for BTC products and $ 72.3 million in total outflows for ETH products.

“What has pushed Bitcoin into a ‘crypto winter’ in the last six months can largely be explained as a direct result of increasingly hawkish rhetoric from the US Federal Reserve.

While CoinShares indicated that Bitcoin has been pushed into a cryptocurrency winter, the supply so far this year (YTD) for BTC investment products remains at $ 450.8 million. In comparison, funds offering exposure to ETH have seen hefty YTD outflows of $ 386.5 million, suggesting that sentiment among institutional investors continues to favor digital gold.

The report also highlighted that total assets under management (AUM) for Ether funds have “fallen from the peak of USD 23 billion in November 2021 to USD 8.7 billion” from last week.

In particular, it appears that institutional investors unloaded their BTC and ETH products before most of the recent price blood flowed with both assets.

Related: The Bitcoin price falls to the lowest since May when the Ethereum market trades at a loss of 18.4%

According to data from CoinGecko, between June 6 and June 10, the price of BTC and ETH fell 4.7% and 5.9% each. Since June 11, however, BTC and ETH have plummeted by 25.7% and 33.2%, respectively.

Aside from BTC and ETH outflows, multi-asset funds saw outflows of $ 4.7 million, and Short Bitcoin products had minimum outflows of $ 200,000. At the same time, investors have also “steered away from adding altcoin positions.”

Flows by assets: CoinShares