According to the latest CoinShares weekly digital asset fund flows report, investment products tracking cryptocurrencies recorded $414 million in net outflows for the week ending March 27, 2026. This marked the first weekly outflow in five weeks, ending a streak of inflows that totaled about $2.2 billion.
Ethereum (ETH) led the outflows with approximately $222 million withdrawn, pushing its year-to-date flows into negative territory around -$273 million. Bitcoin (BTC) saw $194 million in outflows, though it remains strongly positive year-to-date roughly +$964 million.
XRP was a notable exception, attracting modest inflows while most other assets saw red. Spot Bitcoin ETFs specifically posted around $296 million in outflows, snapping a prior four-week inflow streak. Total assets under management (AUM) across these products fell to about $129 billion, a level last seen in early February 2026.
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The United States dominated the outflows, with roughly $445 million withdrawn. Switzerland saw minor outflows ~$4 million, while some smaller inflows appeared in Germany and Canada in certain reports. Analysts attribute the reversal primarily to: Escalating geopolitical tensions, particularly fears around the Iran conflict and related market volatility.
Shifting Federal Reserve expectations: Markets moved away from anticipated rate cuts toward a more hawkish stance or even potential rate hikes at the June FOMC meeting amid persistent inflation concerns. This weighed on risk assets broadly. A general rise in caution among investors, with the Crypto Fear & Greed Index hovering in Fear territory around 27 as Bitcoin traded near $67,000–$68,000 during the period.
This comes after a period of resilience in crypto fund flows despite earlier macro and geopolitical noise. Note that early data for the current week has shown some partial recovery in spot Bitcoin ETF inflows in certain reports ~$414 million mentioned in isolated early-week snapshots, but the overall sentiment remains cautious amid ongoing uncertainty.
The Federal Reserve’s target range for the federal funds rate remains at 3.50%–3.75%, unchanged since the FOMC’s March 17–18 meeting. The committee voted to hold steady, describing policy as appropriately balanced amid solid economic growth, a resilient labor market, and inflation that has been sticky above the 2% target—recently complicated by geopolitical shocks.
The Fed’s Summary of Economic Projections showed a hawkish tilt compared to December 2025: Median forecast for end-2026: 3.4% unchanged, implying one 25bp cut sometime in 2026, most likely late in the year. Only 5 of 19 officials now see two or more cuts, down sharply from 8 previously. A majority expect zero or one cut for the full year.
Median for end-2027 at ~3.1%; longer-run neutral rate raised slightly to 3.0%. Officials nudged up near-term PCE inflation forecasts due to energy price spikes, but still see it trending toward 2% over time if the economy cooperates. This reflects greater caution: the Fed is data-dependent and not rushing to ease. Interest-rate futures as of late March 2026 align closely with the Fed but show even more uncertainty: Near-term (April/June meetings): Overwhelming probability of no change typically 80–99% for the next few meetings.
Full-year 2026: Roughly consistent with one 25bp cut by year-end; implied rate around 3.25%–3.50%, but the probability of zero cuts or even a modest hike has risen sharply. Odds of at least one hike by December climbed to ~25% by mid-March and briefly exceeded 50% in some snapshots late last week—driven by oil price volatility. Traders are pricing in a wider range of outcomes than the Fed’s median dot.
February CPI held steady at 2.4% y/y and ~2.5% core—better than feared but still elevated. However, the Fed’s preferred PCE gauge showed core at 3.1% in January. Energy costs from the Iran conflict are expected to push both measures higher in Q2–Q3. Surging oil prices have raised near-term inflation risks. Powell noted it is too soon to know the full scope but acknowledged upside risks to inflation and thus to rates.
He explicitly said a rate hike is not off the table if pressures persist—though not the base case. Solid expansion and job gains continue, but risks are to the downside for employment favoring potential cuts versus to the upside for inflation favoring holds or hikes. Powell described the situation as difficult and on the higher borderline of restrictive.
In the post-meeting press conference, he emphasized patience: If we don’t see that progress on inflation, then you won’t see the rate cut. The committee discussed hikes as a contingency but still sees the path as neutral-to-easing over time. Incoming data: March CPI due mid-April, Q1 GDP, and ongoing oil price trends will be pivotal.
Persistent core services inflation + energy shock has delayed the cutting cycle that began with three 25bp cuts in late 2025. In short, Fed rate expectations have shifted from a couple of cuts likely in 2026 to one cut at most, with meaningful odds of none—or even a hike if inflation doesn’t cooperate.
This hawkish pivot away from aggressive easing has weighed on risk assets broadly, including the recent crypto fund outflows you mentioned earlier, as higher-for-longer or even higher rates reduce appetite for speculative investments. Markets will remain highly sensitive to every inflation print and oil price move in the coming weeks.
Fund flow data like this from CoinShares is a useful proxy for institutional and professional investor sentiment, though it doesn’t capture all on-chain or retail activity. Crypto markets remain highly sensitive to macro developments right now.