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Highlights
- XRP overpowers Bitcoin and Ethereum, securing $8.5 million in inflows.
- Digital asset investment products faced significant outflows following 19 weeks of inflows.
- The outflow follows the Fed's hawkish stance and the CPI's inflation report.
The latest weekly data from CoinShares reveal a staggering $415 million outflow in digital asset investment fund following 19 consecutive weeks of capital inflow. Interestingly, XRP secured significant inflows, overpowering key players like Bitcoin and Ethereum. This follows Fed Chair Jerome Powell’s hawkish comments and the US CPI inflation report, which have led to increased market expectations for interest rate hikes.
XRP Flips Bitcoin and Ethereum in Weekly Inflows
According to the weekly report released by CoinShares, XRP has hit a staggering weekly inflow of $8.5 million, overpowering Bitcoin and Ethereum. In fact, Bitcoin became the most affected digital asset, with a notable outflow of $430 million. Ethereum also faced outflows of $7.2 million, following Bitcoin.
CoinShares’ weekly data reveals a significant reversal in market sentiment, with digital assets suffering $415 million in outflows, snapping a 19-week streak of consecutive inflows.
While Bitcoin suffered the largest outflows, Solana bucked the trend, attracting $8.9 million in inflows, making it the top asset for inflows. XRP trailed closely behind with $8.5 million in inflows. Sui, Cardano, and Litecoin also saw positive momentum, securing inflows of $6 million, $1.9 million, and $1.2 million, respectively.
US Leads Crypto Outflows Despite Key XRP Developments
Notably, a majority of outflows originated in the United States, totaling $464 million. Although the SEC’s recognition of altcoin ETFs tracking assets such as XRP marked a positive milestone, the US witnessed substantial outflows.
Other global powers including Australia, Canada, Germany, Sweden, and Switzerland marked substantial inflows, with Germany leading the pack.
Interestingly, Germany attracted $21 million in inflows, with Switzerland and Canada trailing behind with $12.5 million and $10.2 million, respectively. Meanwhile, Hong Kong experienced an outflow of $4 million and Brazil followed behind with a $2.1 million negative flow.
Among digital asset providers, iShares ETFs saw the largest inflow of $130 million. Meanwhile, Fidelity ETFs bore the brunt of outflows, losing $282 million.
US Fed’s Hawkish Stance and CPI Report Spark Concerns
As per CoinShares’ report, the digital asset investment products’ massive outflow is a result of the Federal Reserve’s hawkish stance and the CPI report’s higher-than-expected inflation rate.
During his semi-annual monetary report to the U.S. Congress on February 12, Fed Reserve Chair Jerome Powell expressed his hawkish approach to interest rate cuts. Positing that the Fed sees no urgency to alter its policy stance, Powell added,
Our policy stance is now less restrictive than it had been, and the economy remains strong. We do not need to be in a hurry to adjust our policy stance.
Meanwhile, the US CPI report for January, released on the same date, unveiled a hotter-than-anticipated inflation rate. The inflation has risen to 3%, up from 2.9% in the previous month. The rate jumped to 0.5% in January, surpassing the 0.4% increase seen in December.
The Fed’s cautious approach to interest rate cuts has fueled concerns of a potential bear market, while higher inflation data has given the central bank room to maintain its hawkish stance. As a result, digital asset investment products have experienced significant outflows.
Despite XRP’s notable achievement, the token’s price remains in a negative sphere. Currently trading at $2.71, XRP has experienced a marginal decline of 0.67% over the last 24 hours and a notable dip of 15% over the last one month. However, the token exhibited an increase of 11% in a week.
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