Bitcoin and Ethereum Funds Lost $876 Million Despite Trump’s Strategic Crypto Reserve Announcement

This marks the fourth consecutive week of outflows, with a total loss of $4.75 billion during this period, reducing the year-to-date inflows to $2.6 billion. James Butterfill, CoinShares Head of Research, noted in recent report, “Although this indicates a slowdown in the pace of outflows, investor sentiment remains bearish.”

Its probably not surprising to hear that U.S. investors withdrew $922 million from crypto funds, as mentioned in the report. This is happening at the same time President Donald Trump is raising a trade war with major trading partners like Canada, Mexico, and China.

Also read: Why Crypto Market is Crashing？ Trumps Tariff War Wipes Out $800 Billion

Also, last week, President Trump followed through on his promise to set up a national Bitcoin reserve and a stash of other cryptocurrencies. However, the way it was done seems to have disappointed many traders.

Assets under management at these funds have shrunk by $39 billion from their peak, bringing the total down to $142 billion. This is the lowest level observed since just after the U.S. presidential election in November.

High Inflation Boosts Market Decline

In the last month, outflows from ETFs have resulted in a 10% drop in the total cumulative inflows. This shows rising investor fear and suggests that many investors may have already filled their intended cryptocurrency allocations.

Besides tariffs, the rising US inflation is playing a key role in the recent crypto market crash. Given the U.S. jobs report released on Friday, the sentiment turned toward challenging weekend in the crypto markets. The report showed a rise in unemployment to 4.1%, putting the Federal Reserve in a tough spot to choose between focusing on economic growth or managing inflation, according to statement.

The Federal Reserve‘s Open Markets Committee is scheduled to announce its decision on inflation on the upcoming March 19th. As of now, based on the CME FedWatch Tool, investors believe there’s approximately a 3% chance that the FOMC will decide to lower interest rates.