Crypto Funds See $223M Outflow as Fed Rate Comments Snap 15-Week Inflow Streak

Investor Caution Reemerges as Fed Comments Trigger Profit-Taking

Cryptocurrency investment funds broke their 15-week streak of positive inflows, recording a $223 million outflow last week as investor sentiment cooled following the U.S. Federal Reserve’s latest policy meeting.

The data, published by CoinShares on Monday, suggests that profit-taking and shifting macroeconomic expectations are behind the reversal. While the week started strong with $883 million in inflows, sentiment sharply reversed after the Federal Open Market Committee (FOMC) meeting and stronger-than-expected U.S. economic data.

“Given we’ve seen $12.2 billion in net inflows over the past 30 days—accounting for 50% of year-to-date flows—it’s not surprising to see some investors locking in gains,” CoinShares noted in its report.

Hawkish Fed Remarks Cool Rate Cut Hopes

The retreat in crypto fund flows followed Fed Chair Jerome Powell’s post-meeting comments, which signaled a continued cautious stance on rate cuts. According to data reported by Cointelegraph, market expectations for a September rate cut dropped from 63% to 40% following Powell’s statements.

That shift in sentiment coincides with a historically weak month for Bitcoin. Data from CoinGlass reveals Bitcoin’s median August return is -7.49%, making it one of the most challenging periods for crypto investors.

Source: CoinShares

Related: Crypto Funds See Mixed Sentiment With Modest $6M Inflows, Says CoinShares

Bitcoin Leads Outflows; Ether Defies Trend

Bitcoin (BTC) bore the brunt of the investor pullback, seeing $404 million in outflows from crypto investment products—more than offsetting gains seen earlier in the month.

Still, some analysts remain optimistic. In a Friday note, Matrixport said Bitcoin could benefit from renewed momentum once Congress returns from summer recess:

“Fiscal uncertainty has historically been a tailwind for hard assets, and Bitcoin remains a central narrative in that context,” the report stated.

Ether Posts 15th Week of Inflows

In contrast to Bitcoin’s retreat, Ether (ETH) remained resilient. Ether-focused ETPs attracted $133 million in net inflows, continuing their 15-week positive streak, according to CoinShares.

Analysts attribute this strength to “sustained positive sentiment” toward Ethereum’s long-term fundamentals, particularly with the growing institutional interest in smart contract platforms.

Selective Altcoins Still Attracting Capital

Several altcoin-focused funds also posted modest inflows:

• XRP: +$31.2 million

• Solana (SOL): +$8.8 million

• Sui (SUI): +$5.8 million

These inflows indicate that while the broader market is cooling, investors are still selectively allocating capital to high-conviction altcoins.

Bitcoin monthly returns. Source: CoinGlass

Related: Crypto Markets Stay Stable Amid Trump’s Tariff Turmoil, Says NYDIG

Tariffs Add Pressure, But Market Holds Firm Above $3.7T

Adding to macroeconomic pressures, U.S. President Donald Trump signed an executive order on Aug. 1, imposing reciprocal import tariffs ranging from 15% to 41% on goods from 68 countries. The move sent tremors through traditional markets but failed to significantly disrupt crypto valuations.

“The digital asset market remains anchored above $3.7 trillion, supported by institutional flows and long-term regulatory clarity,” said Stella Zlatareva, editor at digital asset platform Nexo.

She added that despite the volatility, altcoin stability is gradually returning, hinting at more sustained accumulation phases ahead.

Source: CoinShares

Conclusion: Healthy Correction or Start of a Broader Pullback?

While last week’s $223 million outflow may feel significant, it likely represents a short-term pause after a month of record-breaking inflows. With Bitcoin dominance, macro factors, and regulatory clarity all in play, the next few weeks could determine whether this is a brief correction or a shift in broader market sentiment.