The combination of fiscal uncertainty and a more restrictive stance from the US Federal Reserve has kept digital assets largely sideways, with market sentiment remaining mixed. #bitcoin Digital assets were the main loser this week, recording outflows of USD 851 million by the close of trading on Thursday. In contrast, digital assets recorded #ethereum and #solana saw inflows of USD 133 million and USD 380 million respectively over the same period.
Investors seem to have taken Jerome Powell's restrictive forecasts literally and reduced their positions in view of the lower probability of a rate cut in December. We expect these rate expectations to recalibrate once the government shutdown ends and the delayed macroeconomic data is released. These should provide a clearer picture of the underlying economic damage and the policy response ahead.