Crypto Inflows Drop to $48 Million Amid Economic and Monetary Policy Concerns

• Crypto market is volatile because of U.S. economic changes and Fed policies.
• Crypto Inflows dropped to $48M after early 2025 optimism.
• $940M outflows followed strong early inflows.
• Fed’s cautious approach pressures crypto sector,
• Economic reports may shift market sentiment.
• Optimism remains with Trump’s pro-crypto policies.

The cryptocurrency market has been quite sensitive these days with ups and downs due to the every-changing economic conditions as well as the changes in U.S. monetary policies. As a result, the crypto inflows has dropped to about $48 million!

Now, the drop is a bit surprising since we saw some strong inflows in the first week of January 2025. The post-U.S. election sparked some hope in the crypto market, leading to the value of cryptocurrencies and stablecoins going up. But now it seems that economic factors are again driving the market.

How Fed Policies Are Impacting the Crypto Market

As per the latest CoinShares report, the digital assets experienced almost $1 billion in inflows from 1st January 2025 to 11th January 2025. But then some significant macroeconomic data as well as the release of U.S. Federal Reserve’s minutes led to $940 million in outflows after that.

The report states,

“This indicates the post-election honeymoon is over, and macroeconomic data is once again a primary driver of asset prices.”

The Federal Open Market Committee (FOMC) minutes highlighted how inflation and economic conditions were causing some concerns, especially taking into account President-elect Donald Trump’s proposed policies. There are no signs of a rate cut in the near term. Moreover, the Fed has taken on a rather cautious approach, causing some pressure for those looking to invest in risky investments such as cryptocurrencies.

We saw Bitcoin, the most popular digital asset, reflecting this exact trend. Initially, Bitcoin had inflows amounting to $214 million at the start of the week. But it suffered from serious outflows later on, matching with the broader market situation. Despite this hiccup, Bitcoin still retains its position of being the top-performing digital asset. It has a total of $797 million in inflows.

A Promising Start Hit a Roadblock

2025 started off being an optimistic year for the crypto sector, with the inflows totaling $585 million in the initial week. Yet, Fed policies and worries about the recent inflation have cast doubt among crypto investors. The outflows have increased, and the inflows have been significantly reduced.

The upcoming economic reports such as the Consumer Price Index (CPI) and the Producer Price Index (PPI) could again shift the market sentiment. It could help alleviate some of the doubts that investors are having. That’s why investors are keeping a close lookout for any signs of easing inflation or a possibility of cooling job market. All these reports will play a role in influencing the policies Fed sets and, by extension, the crypto market.

Long-Term Outlook and BTC Performance

No matter that the recent challenges have been for the crypto sector, the community still remains optimistic and hopeful about the future.

Especially since President-elect Donald Trump’s inauguration is set for next week. Trump has been a supporter of digital assets for a while now, so policies during his tenure are bound to reflect that.