Fed Fears Trigger $223M Crypto Exodus—But Smart Money Sees a Buying Opportunity

Another week, another knee-jerk reaction from paper-handed investors.

As the Fed plays chicken with interest rates, crypto funds bled $223 million last week—proof that most traders still can't tell macroeconomic noise from blockchain signal.

The silver lining? Every panic sell-off creates a discount window for those who understand crypto's long game.

While Wall Street frets over Powell's poker face, Bitcoin's plumbing keeps improving. Lightning Network capacity hit new highs, Ethereum's L2s are eating traditional finance, and real-world asset tokenization keeps chugging along.

Funny how the 'smart money' always misses the forest for the Fed's trees.

$1B Flee as Rate Jitters Spark Risk-Off Exodus

By Friday, outflows exceeded $1 billion as risk-off momentum took hold, likely spurred by fears of prolonged higher interest rates. While weaker payroll data toward the end of the week offered some dovish signals, they weren’t enough to calm markets.

Bitcoin saw the sharpest pullback, with $404 million in outflows, highlighting its continued sensitivity to macroeconomic shifts.

Still, year-to-date inflows into Bitcoin products stand at $20 billion, reflecting sustained institutional interest despite the volatility.

Ethereum, in contrast, posted a solid week. It logged $133 million in inflows, its 15th consecutive positive week, underscoring investor confidence in its long-term fundamentals.

XRP followed with $31.2 million in inflows, while solana and SEI attracted $8.8 million and $5.8 million, respectively.

Smaller gains were also seen in AAVE and Sui, which brought in $1.2 million and $0.8 million.

Digital asset investment products saw US$223m in outflows last week，reversing early-week inflows of US$883m — likely a reaction to hawkish Fed signals and stronger-than-expected U.S. economic data. Bitcoin led the outflows with US$404m while ethereum seeing US$133m inflows.…

With $12.2 billion in net inflows over the past 30 days, representing half of 2024’s total inflows so far, last week’s outflows may simply reflect a bout of profit-taking amid macro uncertainty.

As reported, spot bitcoin ETFs recorded $812.25 million in net outflows on Friday, marking the second-largest single-day exodus in the history of these products.

The sudden reversal wiped out a week’s worth of inflows and cut cumulative net gains to $54.18 billion.

Total assets under management (AUM) across Bitcoin ETFs dropped to $146.48 billion, equivalent to 6.46% of the cryptocurrency’s total market capitalization.

Likewise, spot Ether ETFs broke their 20-day inflow streak, their longest to date, logging $152.26 million in net outflows on the same day.

The total AUM for Ether ETFs now stands at $20.11 billion, or 4.70% of Ethereum’s market capitalization.

95% Approval Chance for Spot Solana, XRP ETFS

As reported, Bloomberg’s senior ETF analysts have assigned a 95% chance that the SEC will approve spot ETFs for Solana, XRP, and Litecoin this year, raising their previous odds from 90% amid growing Optimism for institutional crypto products.

They also expect a crypto index ETF tracking multiple assets could gain approval as early as this week, signaling broader access to altcoins for traditional investors.

Beyond ETFs, institutional Bitcoin demand is spreading into corporate treasuries.

Just today, Metaplanet added another 463 Bitcoin to its growing treasury, pushing the company’s total holdings to 17,595 BTC.

At current prices, Metaplanet’s total BTC stash is now worth more than ¥261.28 billion or about $1.78 billion. But the company values the holdings even higher based on market gains, bringing its estimated market value closer to $2.02 billion.