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Last week, crypto investment products experienced substantial outflows amounting to $305 million. This trend was observed across various providers and regions, as detailed in CoinShares’ most recent weekly report.

James Butterfill, the head of research at CoinShares, attributed these significant outflows to stronger-than-anticipated US economic data. He elaborated that this data has “diminished the likelihood of a 50-basis point interest rate cut,” leading to a shift in investor sentiment.

Butterfill further emphasized:

“We continue to expect the asset class to become increasingly sensitive to interest rate expectations as the Federal Reserve approaches a potential pivot.”

Bitcoin bore the brunt of these outflows, with major asset managers such as Grayscale, ProShares, and 21Shares all reporting net losses during the week. Bitcoin itself saw an outflow of $319 million. The United States, specifically, experienced a slightly smaller total outflow of $318 million.

In a contrasting trend, short Bitcoin investment products recorded their highest inflows since March, attracting $4.4 million for the second consecutive week.

Ethereum also faced its share of outflows, losing $5.7 million. Additionally, trading volumes for Ethereum remained stagnant at only 15% of the levels observed during the US ETF launch week.

Galaxy Digital had previously noted that Ethereum ETFs were trading at significantly lower volumes compared to Bitcoin ETFs. The Ethereum ETF trading volumes were much lower than the ETH/BTC centralized exchange volume and market cap ratios. One reason for this disparity is that prime trading desks have not yet begun offering margin on Ethereum ETFs.

Galaxy Digital commented:

“The ratio of Ethereum ETF volume to Bitcoin ETF volume in the first 25 days has continued to decline.”

Amidst the overall negative market trend, Solana stood out by attracting $7.6 million in inflows, going against the broader market direction. Blockchain equities also experienced positive momentum, with $11 million flowing into products focused on Bitcoin miners.

This surge in investment towards Bitcoin miners is attributed to their innovative approach of utilizing their BTC mining equipment to supply computational power to artificial intelligence (AI) companies.