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Crypto Products See $360M Outflow Amid Powell’s Rate Cut Caution

Cryptocurrency ETFs See $360 Million Outflows Amid Fed Uncertainty, Solana and Ethereum ETFs Gain Momentum

  • Cryptocurrency investment products experienced $360 million in outflows last week following cautious remarks from Federal Reserve Chair Jerome Powell.
  • The U.S. market led the selling with $439 million in outflows, driven mainly by Bitcoin ETFs, which saw $946 million in redemptions.
  • Solana ETFs attracted $421 million in inflows, the second-largest amount on record, fueled by demand for new U.S. products.
  • Ethereum ETFs also recorded positive inflows of $57.6 million amid mixed investor sentiment.
  • Bitwise’s new Solana Staking ETF debuted with $223 million in assets, offering an estimated 7% yearly yield from staking rewards.

Last week, cryptocurrency investment products saw $360 million in outflows as investors reacted to comments from Federal Reserve Chair Jerome Powell. Powell’s statement that a December rate cut is “not a foregone conclusion,” combined with limited economic data due to the U.S. government shutdown, contributed to market uncertainty.

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The U.S. market accounted for most of the selling pressure with $439 million in outflows, partially offset by modest inflows from Germany and Switzerland. Bitcoin exchange-traded funds (ETFs) led the decline, recording $946 million in redemptions. Despite Bitcoin’s outflows, some assets performed well. Solana ETFs attracted $421 million, marking their second-largest inflow on record and pushing year-to-date totals to $3.3 billion. Ethereum ETFs saw $57.6 million in inflows, though daily activity hinted at mixed investor sentiment.

The outflows followed the previous week’s $921 million in inflows, which occurred after a lower-than-expected Consumer Price Index (CPI) release on October 24. Separately, Bitwise’s new Solana Staking ETF launched last Tuesday, debuting with $222.8 million in seed assets. This ETF offers investors exposure to Solana (SOL) and an estimated 7% annual yield from on-chain staking rewards, a process where investors earn returns by helping to validate transactions on the Solana network.

By Friday, spot Solana ETFs had seen inflows for the fourth consecutive day, adding $44.48 million. Vincent Liu, chief investment officer at Kronos Research, described this trend as reflecting increased interest in staking yields and a “capital rotation” from Bitcoin and Ether rallies to Solana. Despite the inflows, Solana’s price traded around $166, down more than 9% in the past 24 hours and about 26% over the last 30 days, according to CoinGecko data.

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