Global digital asset investment products recorded $434 million in outflows this week, according to CoinShares. The firm links the withdrawals to shifting rate expectations after hotter U.S. inflation and stronger retail sales.
Digital asset investment products recorded $434 million in outflows during the reporting week through October 16. In its market update, CoinShares attributed the withdrawals to changing interest rate expectations after September's consumer price report and retail sales figures.
Inflation tops forecasts
September's annual inflation rate reached 3.7%, above the 3.6% forecast and up from 3.4% in August. Data from the U.S. Bureau of Labor Statistics showed gasoline prices climbing 9.1% in September, which accounted for more than half of the monthly rise in the headline index.
CoinShares read the figures as a reason for the Federal Reserve to keep a restrictive policy. The firm argued that higher expected rates increase returns on interest-bearing assets, making Bitcoin less attractive to some investors.
Bitcoin traded near $81,900 after the October 14 release, having fallen from a daily high above $84,100.
Retail sales add pressure on the Fed
Consumer spending gave traders another reason for caution. The Census Bureau reported that retail and food services sales rose 0.8% in September, against expectations of approximately 0.3%. However, once gasoline sales were excluded, monthly growth slowed to 0.2%.
Following those releases, investors reduced expectations that the Fed would keep rates unchanged through the rest of 2026. On October 15, Polymarket assigned approximately a 75% probability to unchanged rates at the October meeting and 25% to a quarter-point increase. CoinShares said futures pricing had become more favorable to additional tightening before the end of the year.
What CoinShares expects next
CoinShares expects upcoming economic releases to influence prices through rate expectations. It named cooling inflation or weaker economic activity as developments that could ease pressure for further tightening.
According to CoinShares research, the expected trading environment is a "data-driven range rather than a trend".
Source: crypto.news
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