Rising inflation in the US triggered a sharp outflow of funds from bitcoin-ETFs

 

This week, the U.S. released consumer price index (CPI) data. In January, inflation rose by 3%

  Spot exchange-traded funds (ETFs) based on bitcoin (BTC) recorded a significant outflow of funds. The reason for this was fresh inflation data.  

Crypto market reaction to inflation growth

  At the end of the last trading session, $56.76 million was withdrawn from spot bitcoin-ETFs. The total outflow since the beginning of this week reached $243 million.     Several factors contributed to the negative dynamics. Earlier, the head of the U.S. Federal Reserve System (Fed) Jerome Powell rejected the idea of President Donald Trump to use rate cuts to slow inflation.   In general, Powell's decision may have a positive impact on the dynamics of the crypto market in the long term. However, in the short term, it makes investors nervous, making them less confident.   In addition, in January, inflation in the US accelerated to 3% year-on-year. This also triggered capital outflows from bitcoin and BTC-oriented crypto funds.   Against the background of the publication of CPI data, the price of the first cryptocurrency in terms of capitalization fell sharply to $94 thousand. By the time of writing this material, the rate of the asset has recovered to $96 thousand, according to CoinMarketCap.  

Ethereum-ETFs outperform similar bitcoin-based instruments

  The factors described above had no effect on Ethereum-ETH, which raised $12.58 million yesterday.     ETH-focused exchange-traded funds are significantly benefiting from the problems of their underlying asset, which cannot be said about bitcoin-ETFs.   Last week, Ethereum-based crypto funds recorded a sharp increase in trading volume. At that time, the price of ETH sagged to levels near $2,300, so investors rushed to buy the cryptocurrency on the downturn. Since then, the asset's exchange rate has remained at roughly the same level, which contributes to an increase in demand for ETFs focused on it.