The cryptocurrency market experienced significant volatility last week, with investment products witnessing outflows totaling $360 million. Investors' reaction to Federal Reserve Chair Jerome Powell's cautious comments regarding future rate cuts was a primary driver behind these outflows.
Despite Wednesday's rate cut, Powell's remark that another one in December was "not a foregone conclusion," coupled with the absence of economic data due to the ongoing government shutdown, appears to have left markets uncertain, according to a report by CoinShares on Monday.
The majority of the selling pressure originated from US markets, which recorded outflows of $439 million, partially offset by modest inflows from Germany and Switzerland. Bitcoin ETFs spearheaded the decline, with redemptions reaching $946 million.
While Bitcoin funds bore the brunt of the outflows, not all assets followed suit. Solana stood out, attracting $421 million in inflows, its second-largest on record. This surge was primarily driven by demand for newly launched US exchange-traded funds (ETFs), pushing year-to-date totals to $3.3 billion. Ethereum also experienced inflows of $57.6 million, although daily activity suggested mixed sentiment among investors.
Bitwise's new Solana Staking ETF (BSOL) debuted last Tuesday with $222.8 million in seed assets, indicating robust institutional demand for Solana staking products. BSOL offers investors direct exposure to Solana (SOL) with an estimated 7% annual yield from on-chain staking rewards.
By Friday, spot Solana ETFs had registered a fourth consecutive day of inflows, adding $44.48 million. Vincent Liu, chief investment officer at Kronos Research, told Cointelegraph that this trend reflects growing interest in staking yields and ongoing "capital rotation," as traders capitalize on recent Bitcoin (BTC) and Ether (ETH) rallies.
Despite the surge in Solana ETF inflows, at the time of writing, SOL was trading around $166, down over 9% in the past 24 hours and about 26% in the last 30 days, according to CoinGecko data.
Risk Warning: this article represents only the author’s views and is for reference only. It does not constitute investment advice or financial guidance, nor does it represent the stance of the Markets.com platform.When considering shares, indices, forex (foreign exchange) and commodities for trading and price predictions, remember that trading CFDs involves a significant degree of risk and could result in capital loss.Past performance is not indicative of any future results. This information is provided for informative purposes only and should not be construed to be investment advice. Trading cryptocurrency CFDs and spread bets is restricted for all UK retail clients.
