Global Crypto Investment Products Records $352M in Weekly Outflow

Global crypto investment products, including those from major companies such as Bitwise, BlackRock, and Grayscale, experienced a huge outflow of $352 million last week. According to CoinShares data, the outflow indicates ongoing investor uncertainty despite better U.S. interest rate cut prospects. 

James Butterfill, Head of Research at CoinShares, also affirmed that even weaker-than-expected payroll data failed to boost market sentiment. This highlights increased caution among digital asset investors.

Ethereum Takes the Biggest Hit, But Some Altcoins See Gains

Ethereum (ETH) saw $912 million in withdrawals last week. Meanwhile, Bitcoin experienced $524 million in inflows, offsetting Ethereum’s heavy outflows. 

Solana (SOL), XRP, and Sui also gained notable inflows, showing that some investors still believe in certain digital currencies. Notably, most withdrawals came from the United States, where investors pulled $440 million.

However, Germany, Hong Kong, and Canada saw inflows of $85.1 million, $8.1 million, and $4.1 million, respectively. This suggests that investors in these countries are showing more confidence in digital assets.

In addition to the outflows, cryptocurrency trading volumes declined by 27% week-over-week, indicating reduced participation across retail and institutional sectors. However, year-to-date inflows remain at $35.2 billion. 

Fed Speech Turns Crypto Funds Outflow Into Fresh Inflows

Recall that in August, crypto funds faced a turbulent shift. As reported by TheCoinRise, outflows hit $1.43 billion, marking the steepest withdrawals since March. Yet, at the same time, investors were unusually active. 

Reportedly, investors were initially worried that the U.S. Federal Reserve might take a tougher stance on interest rates. Fear of tighter policy drove nearly $2 billion out of the crypto market in just a few days. However, things changed after Fed Chair Jerome Powell spoke at the Jackson Hole meeting. 

His comments were softer than expected, which lifted confidence and brought nearly $600 million back into crypto later in the month. This really shows how quickly investors’ sentiment can turn around. Around the same time, spot Bitcoin and Ether ETFs registered significant outflows, coinciding with the release of fresh U.S. inflation data. 

Adoption Outlook and Long-Term Growth

Meanwhile, amid the market’s short-term swings, longer-term adoption trends remain strong. Former hedge fund manager and macro investor Raoul Pal projected that global crypto users could reach 4 billion by 2030. 

In a post, Pal compared the growth of crypto adoption with the internet trajectory. He noted that the crypto user base has grown by 137% annually over the past nine years, reaching an estimated 659 million by the end of 2024.

By comparison, the internet counted 187 million users at the end of 2000, growing at a 76% annual rate. Pal expects crypto adoption to moderate to a 43% growth rate next year. He also predicts that by 2030, one in eight people worldwide could be active crypto users.