Crypto Outflows Surge Amid Strong US Jobs Data
Crypto investments saw $147 million in outflows last week as strong US jobs data reduced hopes for major Federal Reserve rate cuts.
Crypto investments faced outflows of $147 million last week, ending a streak of positive inflows seen since early September, according to a recent CoinShares report. The change is linked to strong US economic data, which dampened expectations for significant rate cuts from the Federal Reserve.
Bitcoin led the losses with $159 million in outflows, while Ethereum saw $28.9 million withdrawn. This marked a reversal for both assets, as they had been experiencing positive inflows in recent weeks. Multi-asset investment products, however, continued to see inflows for the 16th week, adding $29 million.
The shift in investor sentiment comes amid signs of a booming US economy. The latest jobs report showed the addition of 254,000 non-farm payroll jobs in September—almost double the 140,000 expected by analysts. This pushed the unemployment rate down to 4.1%, challenging the Fed’s anticipated policy moves.
The Federal Reserve’s stance on interest rate cuts remains a key focus for investors. As of now, the CME FedWatch Tool indicates an 86.3% chance of a 50 basis point cut. However, this could shift based on new economic data, including the Consumer Price Index (CPI) and Producer Price Index (PPI) reports expected later this week.
Bitcoin and Ethereum were hit hardest by the outflows, reflecting uncertainty among investors due to conflicting signals about the economy and inflation. Rising oil prices and geopolitical concerns also contribute to a volatile market. Meanwhile, multi-asset products have become a popular choice for investors seeking diversified exposure. CoinShares noted that these products have been favored since June, offering a safer bet compared to individual assets like Bitcoin.
In summary, last week’s $147 million outflows mark a turning point for digital assets amid strong economic data and fading hopes for major Fed policy adjustments. Investors are now closely watching upcoming reports to understand how the Fed will respond and whether this trend will persist.
