Global Digital Asset Exchange-Traded Products (ETPs)
Global digital asset exchange-traded products (ETPs) recorded net inflows of $308 million last week, despite intra-week outflows and heightened market volatility following the Federal Reserve’s Dec. 18 rate cut.
Inflows by Asset
- Bitcoin: $375 million in net inflows for the week.
- Ethereum: $51 million added.
- Solana: $8.7 million in outflows.
According to CoinShares data, these net inflows highlight continued institutional interest in digital assets despite shifting macroeconomic conditions, according to CoinShares Head of Research James Butterfill.
Multi-Asset Products and Selectivity
However, Butterfill noted that multi-asset investment products experienced more pronounced outflows totaling $121 million. He commented, “Although many altcoins continued to see inflows — such as XRP ($8.8 million), Horizen ($4.8 million), and Polkadot ($1.9 million) — these trends suggest investors are adopting a more selective approach within the digital asset market.”
Market Volatility
Despite the overall net inflows for digital asset ETPs last week, Butterfill emphasized the significant market volatility toward the end of the week should not be overlooked. “The net inflows mask the largest single day of outflows on Dec. 19, totaling $576 million,” he noted, with total outflows in the final two days of the week at $1 billion.
Market Reaction to FOMC Meeting
The Federal Reserve’s press conference after its Dec. 18 meeting influenced market dynamics, according to Butterfill. While the central bank announced a rate cut, Fed Chair Jerome Powell’s post-meeting comments — including a more hawkish economic outlook — sparked risk-off sentiment across markets. Key indicators included the Fed’s revised 2025 core PCE inflation projections, increasing to 2.5% from 2.2%, and indications of only two rate cuts in 2025 instead of the previously anticipated four.
According to Wintermute’s OTC trading desk analysts, the market downturn that started in the middle of last week mirrored declines in equities and bonds as traders adjusted their risk exposure ahead of the low-liquidity holiday season.
Analysts noted derivatives traders protecting their positions, particularly in the form of put options, which are bets that the price of an asset will drop. “General protection demand has pushed skew into put premium out until Jan. 10, and the market seems positioned for some downside volatility in the near-term in the face of shaky traditional risk assets.”
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