Stronger-than-expected macro data pushes US investors to short Bitcoin

The crypto industry has yet to exit a period of heightened volatility as asset outflows remain the dominant market trend.

Despite its slowly rising price, Bitcoin saw outflows for the third week in a row. Data from CoinShares showed that outflows were $12 million last week – while inflows reached $10 million.

While $2 million in outflows is not significant, the amount of inflows is. A whopping $10 million in inflows were into digital asset investment products that shorted Bitcoin.

Ethereum remained unscathed – seeing just $200,000 in outflows in the past week – while smaller inflows were seen in Polygon (MATIC), Solana (SOL) and Cardano (ADA).

The increase in short-bitcoin inflows can be attributed to increased negative sentiment in the US. Investors in the country have become increasingly nervous after the much-anticipated FOMC meeting last week, when the Federal Reserve released stronger-than-expected macro data.

The large difference between the outflows seen in the US and the rest of the world can be attributed to the sensitivity of the US market to regulatory intervention. Less regulated markets are less likely to see significant outflows or an increase in short positions following announcements or enforcement by government agencies.

This is evident in blockchain shares – a regulated product available to investors in the US and Canada. Negative sentiment also hit them, leading to $7.2 million in outflows.

Since peaking in November 2021, listed blockchain companies have become increasingly sensitive to broader market movements. Most listed blockchain companies are focused on growth – meaning that even the smallest changes in interest rates make them vulnerable and subject to volatility.