Between Donald Trump and the Federal Reserve, crypto funds got whiplashed last week.
Digital asset investment products, including spot Bitcoin and Ethereum ETFs, collectively saw just $48 million worth of inflows last week, according to CoinShares. Bitcoin products finished the week with $214 million in net inflows, while Ethereum products bled $255 million.
Investors began the week with $1 billion in crypto allocations, but a strong start to the New Year was quickly outweighed by macro unease. Hawkish minutes from the Fed’s latest meeting and strong readings on the U.S. economy led investors to pull $940 million from digital asset investment products—effectively canceling out the initial inflows.
“This suggests that the post-U.S. election honeymoon is over, and macroeconomic data is once again a key driver of asset prices,” CoinShares Head of Research James Butterfill wrote.
Last week, Fed minutes showed that policymakers are viewing potential shifts in immigration and trade policy under President-elect Donald Trump as a source of inflation pressures. In December, they also signaled they would cut rates at a slower pace this year.
Equities and crypto assets tend to thrive in lower interest rate environments, with cheaper borrowing and greater liquidity. But amid a series of reports showing that the U.S. economy remains strong, some analysts are saying that the Fed’s easing campaign is effectively over.
Combined with the U.S. economy’s recent strength, Butterfill told Decrypt that Bitcoin’s price growth is limited from a macro perspective, while “the market seems to be in a negative funk.”
“Any upside momentum for Bitcoin is more likely to emerge from the approval of Bitcoin-related legislation following [Trump’s inauguration] or some significant misses,” he said.
Over the past week, Bitcoin’s price has fallen 10% to $91,600, touching its lowest price in two months. Meanwhile, Ethereum’s price has dropped 18% to $3,000, while XRP has remained relatively steady at $2.43.
With XRP products taking in $41 million, Butterfill wrote that the altcoin is seeing “heightened optimism” ahead of an approval deadline for spot XRP ETFs in the U.S. later this month. Bloomberg ETF Analysts James Seyffart previously wrote that it’s unlikely the applications will be taken seriously until a change of agency leadership under Trump.
In 2024, investors allocated $42.9 billion to Ethereum and Bitcoin products, shoveling in cash alongside the debut of spot ETFs for the cryptocurrencies in the U.S. In 2025, Bitcoin products have pulled in $797 million, while Ethereum products have let go of $274 million, so far.
Even though diminishing odds of Fed rate cuts are a net negative for the crypto market, inflows could still pick up again soon, Bitwise Senior Investment Strategist Juan Leon told Decrypt.
In the U.S., spot Bitcoin ETFs have been subject to due diligence processes among registered investment advisors and wirehouses, Leon said. As financial firms work through the approval process, inflows could accelerate, as governments and corporations possibly buy Bitcoin too.
“This will drive Bitcoin’s price higher,” Leon said. “We expect inflows into spot Bitcoin ETFs will be bigger this year than last year.”
Edited by Andrew Hayward
Daily Debrief Newsletter
Start every day with the top news stories right now, plus original features, a podcast, videos and more.
Source: https://decrypt.co/300724/xrp-demand-etf-optimism-ethereum-funds-bleed
