Digital asset investment products experienced $147 million in outflows last week, as investor sentiment turned cautious due to stronger-than-expected economic data. According to a Monday report from CoinShares, robust economic indicators have reduced expectations for significant interest rate cuts, which in turn dampened market enthusiasm.
Despite the outflows, trading volumes for exchange-traded products (ETPs) increased by 15%, reaching $10 billion, even as overall crypto market activity remained subdued.
Inflows Lead in Canada and Switzerland
Geographically, investment patterns varied. Canada and Switzerland led the inflows, attracting $43 million and $35 million, respectively. In contrast, the U.S., Germany, and Hong Kong saw significant outflows, with the U.S. losing $209 million, Germany $8.3 million, and Hong Kong $7.3 million.
Bitcoin and Ethereum Face Outflows
Bitcoin saw the largest outflows, amounting to $159 million, as investors pulled back. However, short Bitcoin products saw $2.8 million in inflows, indicating some hedging strategies. Ethereum followed the negative trend, recording $29 million in outflows as investor interest waned.
Multi-Asset Products Show Positive Trends
On the upside, multi-asset investment products continued to attract inflows, bringing in $29 million—marking the 16th consecutive week of positive trends. Since June, these products have gained $431 million, reflecting the growing demand for diversified exposure to various digital assets.
“Uptober” Narrative Regains Momentum
Despite a rocky start, the “Uptober” narrative seems to be gaining traction again. Bitcoin has stabilized around last Monday’s levels, supported by strong Non-Farm Payroll (NFP) data and renewed interest ahead of an upcoming HBO Bitcoin documentary. Even themed memecoins inspired by Len Sassaman are seeing increased attention.
Options flows suggest a positive outlook for Q4, with interest in December BTC call spreads targeting the $75,000 and $95,000 levels, bolstering the optimism around a potential strong performance in October.
Eyes on U.S. CPI Report
This week’s focus will shift to the U.S. Consumer Price Index (CPI) report due on Thursday. With recent solid wage and employment data, investors will closely analyze the CPI figures for signs of inflationary pressure. Expectations for Federal Reserve rate cuts have shifted from 50 basis points to 25 basis points in just a week, and the upcoming CPI data could further influence policy decisions.
QCP Capital also highlighted sustained interest in BTC December call spreads and suggested a potential strategy—a zero-cost Principal Protected Sharkfin with a December 27, 2024, maturity, targeting a $75,000 strike and a $90,000 barrier, offering up to 90% per annum payout if Bitcoin’s price remains just below $90,000 at expiry.
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