Key Insights:
- Digital asset investment products experienced $352 million in outflows during the week of Sept. 1-5, despite weaker payroll figures improving prospects for a September rate cut.
- Ethereum led outflows, with a $912 million weekly decline, while Bitcoin posted $524 million in net inflows amid divergent investor sentiment.
- US markets drove $440 million in outflows, while Germany and Hong Kong recorded $85.1 million and $8.1 million in inflows, respectively, during the period.
Crypto exchange-traded products (ETPs) investment products recorded outflows totaling $352 million during the week of Sept. 1-5, despite weaker US payroll data that significantly improved prospects for Federal Reserve interest rate cuts later in the month.
A Sept. 8 report by CoinShares showed that trading volumes fell 27% week-on-week, suggesting that institutional appetite for digital assets had cooled, despite macroeconomic conditions that historically favored risk assets.
The combination of minor outflows and reduced trading activity indicated investor uncertainty amid conflicting market signals.
The August payroll data, released on Sept. 5, showed that nonfarm employment increased by just 22,000 jobs, substantially below the 75,000 forecast and marking one of the weakest hiring periods since the Great Recession.
The unemployment rate rose to 4.3%, the highest level since October 2021, while revisions showed June employment actually declined by 13,000 jobs.
Weak Jobs Data Drives Rate Cut Speculation
The disappointing employment figures immediately boosted expectations for a Federal Reserve rate cut. Polymarket odds for a 25 basis point September reduction reached an all-time high of 88% by Sept. 5.
Traders in the futures markets raised the probability of a quarter percentage point Fed rate cut to 100%. The predictions went even further, pricing in a 12% probability of a half-point move, according to the CME Group’s FedWatch gauge following the August jobs report release.
The weak labor market data typically supported risk asset performance by increasing monetary accommodation expectations.
However, crypto ETPs experienced outflows, suggesting investors remained cautious about digital asset exposure despite an improving macroeconomic backdrop for speculative investments.
Regional sentiment proved polarized during the week, with US investors driving $440 million in outflows while European and Asian markets showed resilience.
Germany recorded $85.1 million in inflows, while Hong Kong posted $8.1 million in positive flows, indicating geographic divergence in digital asset investment appetite.
Ethereum Outflows Dominate Weekly Decline
Ethereum emerged as the primary driver of weekly outflows, recording $912 million in net redemptions over the Sept. 1-5 period.
The second-largest cryptocurrency by market capitalization experienced outflows across all seven trading days and among multiple ETP issuers, suggesting broad-based institutional selling pressure.
Despite the substantial weekly decline, Ethereum ETPs maintained strong year-to-date performance with $11.2 billion in total inflows for 2025.
The weekly outflows represented a temporary reversal rather than a fundamental shift in long-term institutional adoption trends for the asset.
Bitcoin demonstrated contrasting performance with $524 million in net weekly inflows despite overall market weakness.
The divergent flows between Bitcoin and Ethereum highlighted varying institutional perspectives on different digital assets during periods of market uncertainty.
Altcoins showed steady institutional interest, with both XRP and Solana continuing multi-week inflow streaks.
Solana extended its positive flow run to 21 consecutive weeks, accumulating $1.16 billion in inflows over that period, while XRP recorded $1.22 billion in flows across the same timeframe.
Crypto Market News: Consolidation Expected Amid Fed Policy Shifts
Looking ahead, Bitcoin technical analysis suggested consolidation between $108,000 and $112,000 levels, with buyers defending key support zones following July’s rapid rally.
The Sept. 8 Bitfinex Alpha report noted that while deeper corrections remained possible, time-based consolidation appeared more likely, especially given September’s historically weak seasonal performance.
Short-term holder profitability normalized during the period, rebounding from 42% to 58% of the cohort remaining in profit.
September historically represented the weakest month for Bitcoin performance with an average of -3.3% return, though recent years showed the “red September” effect had weakened.
October and November traditionally delivered outsized gains, suggesting potential for renewed momentum heading into the fourth quarter.
If the Federal Reserve confirmed September rate cuts, falling real yields and dollar weakness could amplify Bitcoin’s seasonal upside potential.
Until then, consolidation remained the base case, with ETF flows, macro policy shifts, and derivatives positioning serving as critical signals for future direction.
The week’s mixed signals reflected broader market uncertainty as investors balanced improving monetary policy prospects against cooling institutional demand for digital assets, setting the stage for continued volatility in crypto investment products.