CoinShares says 'post-US election honeymoon is over' as macro and monetary policy weigh heavy on crypto fund flows

Global crypto funds run by asset managers such as BlackRock, Bitwise, Fidelity, Grayscale, ProShares and 21Shares registered modest net inflows of $48 million last week as macro and monetary policy reasserted themselves, according to CoinShares.

While the week got off to a good start, with global crypto investment products attracting nearly $1 billion, the release of new macroeconomic data and the Federal Open Market Committee’s latest meeting minutes suggested a stronger U.S. economy and a more hawkish Fed, leading to outflows of $940 million in the latter half, CoinShares Head of Research James Butterfill noted in a Monday report.

“This suggests that the post-US election honeymoon is over, and macroeconomic data is once again a key driver of asset prices,” Butterfill said.

Weekly crypto asset flows. Images: CoinShares.

Bitcoin and ether’s mixed fortunes

Bitcoin-based investment products led last week’s net inflows globally, adding $214 million despite witnessing the largest net outflows later in the week. They remain the best-performing crypto funds this year so far, clocking $799 million worth of net inflows.

The U.S. spot Bitcoin exchange-traded funds represented $312.8 of the overall net inflows, according to data compiled by The Block, though U.S. markets were also closed on Thursday in observance of a national day of mourning for former President Jimmy Carter.

Ethereum-based funds suffered the most, experiencing net outflows of $256 million for the week. “We believe [this] is attributed to the broader tech sell-off rather than any specific issue with the asset,” Butterfill said, reflecting on the Nasdaq 100’s 3.5% decline over the period. 

U.S. spot Ethereum ETFs accounted for $186 million of those net outflows last week, according to The Block's data dashboard.

However, XRP-based products managed to generate $41 million in net inflows last week amid heightened optimism ahead of the Jan. 15 Securities and Exchange Commission appeal deadline in the Ripple case, Butterfill said. Solana-based funds also saw net inflows of $15 million.

Despite poor price performance during the week, other altcoin-based products, including Aave, Stellar and Polkadot, also witnessed net inflows, Butterfill noted.

Bitcoin fell 7.8% over the past week and is currently trading for $90,897, according to The Block’s Bitcoin Price Page. Ether has dropped 14.8% and is now changing hands for $3,063. 

Meanwhile, the GMCI 30 index, which represents a selection of the top 30 cryptocurrencies, is down 12.5% over the past week to 176.64.