Cryptocurrency investment products saw significant outflows last week as investors de-risked amid inflation concerns and uncertainty over a lasting ceasefire between the United States and Iran.
According to the latest CoinShares weekly reportexchange-traded digital products (ETPs) saw net outflows of $1.07 billion, ending a six-week streak of inflows. It was the third-largest weekly outflow this year.
Bitcoin (BTC) investment products accounted for the majority of withdrawals, with outflows totaling $982 million. Ether products (ETH) lost $249 million, the largest outflow since the week ending January 30.
Altcoin funds bucked the broader trend. XRP investment products (XRP) attracted $67.5 million, and Solana funds (SOL) increased inflows by $55.1 million.
Despite last week’s outflows, both Bitcoin and Ether ETP remain strongly positive year-over-year. Source: CoinShares
Most of the outflows occurred in the United States, where investors pulled a net $1.14 billion from funds. Meanwhile, several European markets, including Switzerland, Germany and the Netherlands, recorded moderate inflows.
The pullback in cryptocurrency funds coincided with a broader retreat in risky assets as the S&P 500 fell from all-time highs behind schedule last week. Investors continued to focus on disruptions around the Strait of Hormuz, the most significant shipping lane for global oil supplies, which pushed up energy prices and helped push U.S. inflation back to the highest level in more than three years.
Related: The Crypto CLARITY Act faces a partisan ethics fight in the Senate
The CLARITY Act remains a source of hope for the cryptocurrency industry
CoinShares head of research James Butterfill said select altcoins have benefited from improved regulatory sentiment in the United States following progress on the CLARITY Act.
Legislation that would establish a clearer framework for regulating digital assets in the U.S. passed the Senate Banking Committee last week with bipartisan support.
Industry advocates say the bill could reduce regulatory uncertainty and provide a more predictable legal environment by encouraging crypto companies and investments to remain in the US.
Crypto Council for Innovation CEO Ji Hun Kim said “both momentum and progress are strong” as the legislation moves through Congress.
Source: Faryar Shirzad
However, several Senate Democrats have pushed for stronger ethics rules, particularly regarding elected officials’ financial ties to the crypto industry.
Republican Sen. Thom Tillis said there is “much work left to do in the coming weeks to make this legislation even better.”
Related: Ethics remains a contentious issue as the Cryptocurrency Market Structure Act moves to margin
