The post Here’s Why Crypto Funds Lost $454 Million appeared on BitcoinEthereumNews.com.

Crypto funds experienced a sharp reversal last week, with $454 million in outflows, nearly erasing early-year inflows of $1.5 billion. The sell-off appears linked to dwindling expectations of a Federal Reserve interest rate cut in March, following recent macroeconomic data that suggests the Fed may maintain its current policy stance. Sponsored Sponsored Crypto Funds Lose $454 Million as Fed Rate-Cut Hopes Fade According to the latest CoinShares data, last week’s crypto outflows came after a four-day streak totaling $1.3 billion. It almost completely reversed the optimism seen during the first two trading days of 2026. Friday, January 2, had started the year strongly, with $671 million flowing into crypto funds, highlighting the abrupt swing in investor sentiment. Regionally, the US led the outflows, recording $569 million in withdrawals. By contrast, several other countries bucked the trend, reflecting the widening adoption of crypto investment products outside the US. It also highlights the impact of macroeconomic factors on investor sentiment. “This turnaround in sentiment appears to stem mainly from investor worries over the diminishing prospects of a Federal Reserve interest rate cut in March following recent macro data releases,” read an excerpt in the report. Indeed, Fed rate cut probabilities have shrunk significantly, with the CME FedWatch Tool showing only a 5% chance of a rate cut. The implication on investor sentiment was evident, with Bitcoin bearing the brunt of the negative sentiment. Investment exits linked to the pioneer crypto reached $405 million last week. Sponsored Sponsored Even short-Bitcoin products saw modest outflows of $9.2 million, sending mixed signals about market expectations. Ethereum also recorded significant withdrawals, totaling $116 million, alongside $21 million in outflows from multi-asset products. Crypto Fund Flows Last Week. Source: CoinShares Report Smaller outflows were noted in Binance and Aave products, at $3.7 million and $1.7 million, respectively.…

---

Filed under: News - @ January 12, 2026 12:22 pm