Fed’s Hawkish Tone Sparks $360 Million Outflow from Crypto Funds
The U.S. Federal Reserve’s latest statements have triggered a $360 million capital outflow from cryptocurrency investment products, according to CoinShares — underscoring the market’s sensitivity to monetary policy rhetoric.
Powell’s remarks unsettle investors
Despite the Fed’s decision to maintain the benchmark rate cut earlier in October, Chair Jerome Powell cautioned that another reduction in December is “not a foregone conclusion.” His hawkish tone, combined with a government shutdown that delayed key economic data releases, left markets uncertain and investors risk-averse.
The result was immediate: large-scale redemptions from Bitcoin-linked funds dominated weekly flows, totaling roughly $360 million in net outflows across all crypto products by November 3.
Bitcoin funds hit hardest
According to CoinShares’ weekly report, Bitcoin investment vehicles accounted for 85 % of total redemptions, reflecting renewed caution among institutional traders. The sell-off coincided with BTC’s fall below $104 000 — its lowest level in several weeks — as U.S. yields and the dollar strengthened on Fed comments.
Smaller outflows were recorded in Ethereum and multi-asset funds, while some altcoin products saw neutral or modest inflows as traders diversified exposure away from top assets.
Solana bucks the trend
In stark contrast, Solana-based products continued to attract new capital. The recently launched Bitwise Solana Staking ETF recorded robust inflows during its debut week, helping offset a portion of broader market losses. Total assets under management in Solana ETFs have now surpassed $500 million, reinforcing the narrative of “rotation into performance sectors” amid Bitcoin’s consolidation.
Analysts suggest that Solana’s on-chain activity and DeFi recovery make it an appealing hedge against Bitcoin’s stagnation.
Macro environment and market outlook
The Fed’s uncertain guidance leaves crypto markets tethered to macro sentiment. With the next FOMC meeting scheduled for December 18, traders remain cautious, pricing in lower odds of another rate cut this year.
CoinShares notes that liquidity constraints from the ongoing shutdown could further suppress risk appetite. However, inflows into staking-based and Solana-focused products show investors are selectively seeking yield even in a tightening environment.
Conclusion
The $360 million weekly outflow underscores how monetary policy signals continue to dictate crypto investment flows. While Bitcoin faces renewed headwinds, Solana’s steady inflows highlight that capital rotation — not full-scale exit — defines the current phase of the digital-asset market.
Editorial Team — CoinBotLab