Cryptocurrency investment products took a big hit last week with $600 million in total outflows, which was the largest since March 22, according to CoinShares. This drop came after the Federal Reserve’s recent meeting, where it decided to keep interest rates steady and cut back its 2024 rate cut projections. This spooked investors and led to a pullback from assets like Bitcoin (BTC-USD). Interestingly, the majority of the outflows came from the U.S. at $565 million, while Germany saw inflows of $17.4 million.
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This news comes after JPMorgan warned about the future of crypto inflows last week. Although there have been $12 billion in net inflows this year, largely driven by spot Bitcoin ETFs, analyst Nikolaos Panigirtzoglou noted that most of these inflows might just be money moving from digital wallets to the new ETFs because they’re more cost-effective and offer better liquidity and regulatory protection.
Since these ETFs launched, Bitcoin reserves on exchanges have dropped by 220K BTC. Panigirtzoglou doubts this trend will continue, especially with Bitcoin’s high price compared to its production cost and the price of gold (XAU-USD).
Is Bitcoin a Good Investment?
Using TipRanks’ technical analysis tool, the indicators seem to point to a neutral outlook for Bitcoin. Indeed, the summary section pictured below shows that 10 indicators are Bullish, compared to two Neutral and 10 Bearish indicators.
