Crypto ETFs See $500 Million 'Outflow' Amid Interest Rate Shock...XRP Survives Alone

▲ Bitcoin, Solana, XRP ETF/ChatGPT generated image

Over $500 million in funds flowed out of major cryptocurrency Exchange Traded Funds (ETFs) like a tide, triggered by the shockwave of the U.S. Federal Reserve's (Fed) benchmark interest rate hike.

According to Bitcoin.com on September 17 (local time), a total net outflow of $520.09 million occurred from U.S. Bitcoin (BTC) spot ETFs and Ethereum (ETH) spot ETFs on September 16 alone. This was due to the sharp increase in risk aversion among traditional financial investors after the Fed implemented its first interest rate hike since 2023.

The capital exodus was severe across both major assets. According to data compiled by crypto data platform SoSoValue, Bitcoin spot ETFs saw a net outflow of $295.98 million, marking two consecutive days of capital outflow, with a cumulative outflow reaching $646 million. Ethereum spot ETFs also took a larger hit relative to their asset base, recording a massive net outflow of $224.11 million in a single day.

In contrast, in the altcoin spot ETF market, XRP showed a differentiated trend by absorbing funds alone. The XRP spot ETF recorded a net inflow of $3.5 million solely through Franklin Templeton's (BEN) XRPZ product, effectively neutralizing the selling pressure driven by the interest rate hike. For Solana (SOL) spot ETFs, $2.69 million flowed into Bitwise's BSOL, but $1.85 million flowed out from other products, resulting in only a limited net inflow.

The market diagnoses that concerns about liquidity contraction due to the shift to macroeconomic tightening have stimulated short-term capital outflows from large virtual asset funds. However, with expectations of resolving institutional regulatory risks and the spotlight on individual ecosystem expandability, selective inflows of institutional funds continue into assets, further deepening the polarization within the cryptocurrency fund market.

[Article Summary]

-Following the Fed's benchmark interest rate hike, a net outflow of $520.09 million occurred from U.S. Bitcoin (BTC) and Ethereum (ETH) spot ETFs in a single day.

-The capital outflow was strong, with $295.98 million leaving Bitcoin funds and $224.11 million leaving Ethereum funds.

-Amid a market-wide sell-off, Franklin Templeton's XRP spot ETF uniquely showed strength with a net inflow of $3.5 million.

*Disclaimer: This article is for investment reference only and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*