Crypto inflows reverse to $223M as hawkish Fed sparks market sell-off

Crypto inflows reverse dramatically to $223 million last week after nearly hitting the $1 billion mark, as a hawkish Federal Reserve and stronger-than-expected US macro data upended investor sentiment.

The crypto inflows reverse trend was captured in the latest CoinShares report, revealing how mid-week optimism soured following the Federal Open Market Committee (FOMC) meeting.

Just days earlier, digital asset investment products had attracted $883 million—signaling bullish momentum—but that trajectory sharply reversed.

“The week started strong, with US$883 million in inflows, but this trend reversed in the latter half of the week, likely triggered by the hawkish FOMC meeting and better-than-expected economic data,” said James Butterfill, Head of Research at CoinShares.

Macro data shock causes Crypto inflows reverse

The sharp U-turn in crypto inflows reverse comes on the heels of key economic indicators suggesting a resilient U.S. economy—ironically a red flag for risky assets like crypto.

The FOMC’s less-than-dovish tone signaled that rate cuts might remain off the table for now, sending a wave of caution across global markets.

Friday capped the week with a stunning $1 billion in negative flows, reflecting the sheer weight of investor retreat from crypto markets.

As BeInCrypto reported, the downturn coincided with a jump in U.S. job cut announcements, which more than doubled the average July levels and topped the 4-year average.

The labor market surprise added complexity: while weak payrolls are usually a cue for rate cuts, the broader tone from Fed officials remained cautious, keeping markets guessing.

Crypto inflows reverse: Investors take profits after $12.2b monthly surge

Adding fuel to the crypto inflows reverse fire was a round of profit-taking. Butterfill pointed out that digital asset products had seen $12.2 billion in net inflows over the last 30 days, accounting for half of 2025’s total inflows so far.

That magnitude prompted some investors to lock in gains.

“Given we have seen $12.2 billion net inflows over the last 30 days… it is perhaps understandable to see what we believe to be minor profit taking,” Butterfill noted.

Despite this reversal, the broader structural setup of the crypto market remains bullish, according to analysts.

Ethereum, XRP, Solana defy trend as Bitcoin bleeds

The crypto inflows reverse pattern wasn’t uniform across all digital assets. Ethereum, XRP, and Solana continued attracting investor interest.

Ethereum recorded $133.9 million in positive flows, while XRP and Solana notched $31.3 million and $8.8 million respectively.

Conversely, Bitcoin saw $404 million in outflows, doubling the $175 million in negative flows from the previous week. It marked Bitcoin’s third consecutive Friday sell-off, driven by broader macro jitters and risk aversion.

“This was driven by a confluence of factors: a weaker-than-expected US jobs report and a fresh round of tariffs from Washington,” said analysts at QCP Capital.

Although the crypto inflows reverse trend appears sharp, experts argue it may represent a healthy correction.

QCP Capital analysts believe this drawdown is “a post-rally shakeout,” potentially flushing out over-leveraged positions and paving the way for renewed accumulation.

“Despite the pullback, the broader structural setup remains intact,” QCP analysts wrote.

The macro backdrop may have pushed back expectations for the altcoin season, but it hasn’t derailed them. If liquidity conditions ease in the months ahead—as markets anticipate—the bulls could reclaim momentum.

What’s next after Crypto inflows reverse?

The crypto inflows reverse story highlights the fine balance between macroeconomic forces and investor psychology.

While the fundamentals of blockchain innovation and institutional demand remain strong, near-term flows continue to hinge on central bank policy and global data trends.

With Jackson Hole, more inflation readings, and additional employment data on the horizon, the coming weeks could be pivotal.

“It’s not about whether crypto is back, it’s about whether markets can digest a slower Fed pivot,” said Jeff Dorman, CIO at Arca.

Last week’s crypto inflows reverse isn’t just a data blip—it’s a mirror of macro anxiety. But just as quickly as sentiment soured, it can rebound. Savvy investors will be watching the Fed, not just the price charts.