Federal Reserve rate cut expectations cool down, crypto funds outflow of $454 million in a single week

CoinShares latest digital asset weekly report shows that global crypto funds experienced a net outflow of approximately $454 million last week, nearly offsetting the combined inflow of about $1.5 billion in the first two trading days of the year. The core background of the sentiment shift lies in the market’s noticeably weakened expectations of a rate cut by the Federal Reserve in March.

From a macro perspective, recently released US economic data reinforce the judgment to “maintain interest rates unchanged.” According to interest rate pricing tools, the probability of a rate cut in March has fallen to single digits. CoinShares points out that this change in expectations prompted some institutions to quickly adjust their risk exposure, triggering consecutive days of fund withdrawals.

Regionally, the United States has become the main source of outflows, with a weekly net outflow approaching $570 million. Meanwhile, some non-US regions have seen mild net inflows, reflecting a divergence in the acceptance of crypto assets under different macro environments, and also highlighting the amplifying effect of US interest rate expectations on market sentiment.

At the asset level, Bitcoin-related investment products were under the most pressure, with weekly outflows exceeding $400 million. Ethereum also experienced significant redemptions, and multi-asset products weakened simultaneously. Notably, even Bitcoin short products failed to attract safe-haven funds, indicating that the market has not formed a clear one-sided expectation.

In contrast, some altcoins showed selective inflows. Assets like XRP, Solana, and Sui recorded varying degrees of net inflows, indicating that funds are shifting from broad allocation to targets with relatively stronger momentum and narrative support. This rotation pattern is largely consistent with the “selective allocation” trend since early 2026.

Looking at long-term data, global crypto fund inflows for 2025 still reached as high as $47.2 billion, close to historical highs. Therefore, this round of $454 million outflows is more like a phased adjustment after the re-pricing of interest rate paths rather than a trend reversal. As macro signals gradually become clearer, the structural shifts of funds between Bitcoin and altcoins will continue to dominate the subsequent market rhythm.