Last week marked a significant downturn for U.S. spot Bitcoin exchange-traded funds (ETFs), which collectively witnessed $580.6 million in net outflows, reversing a positive streak that had persisted for several weeks.

According to recent data, Grayscale's GBTC ETF led the outflows with $274.3 million exiting the fund known for its higher fees. Following closely were Ark Invest's ARKB and Fidelity's FBTC, which saw $149.7 million and $146.3 million in net outflows, respectively. In contrast, BlackRock's IBIT ETF was the sole exception, attracting $41.6 million in net inflows.

The previous weeks had seen U.S. spot Bitcoin ETFs enjoying a record 19-day positive streak, accumulating over $4 billion in net inflows. However, this streak abruptly ended with a net outflow of $64.9 million following conflicting economic signals from U.S. non-farm payroll and unemployment data. Uncertainty surrounding the U.S. economy prompted investors to shift away from riskier assets, including Bitcoin.

Leading into the Federal Open Market Committee (FOMC) meeting, anticipation drove further outflows, amounting to $200.4 million on Tuesday. The FOMC's decision to maintain interest rates amid inflationary pressures initially resulted in a brief respite with $100.8 million in net inflows on Wednesday. However, this optimism was short-lived as Thursday and Friday saw substantial outflows of $226.2 million and $189.9 million, respectively.

Globally, digital asset investment products reported $600 million in net outflows, the largest since March 22, according to CoinShares. This bearish sentiment primarily affected Bitcoin, with $621 million in outflows, while there were minor inflows of $1.8 million into short-Bitcoin positions. CoinShares' Head of Research, James Butterfill, attributed this to a "more hawkish-than-expected FOMC meeting," prompting investors to reevaluate their exposure to assets with fixed supplies.

The combined effect of these developments, compounded by a broader crypto market sell-off that saw Bitcoin prices drop by 5%, led to a decrease in global assets under management from $100 billion to $94 billion. CoinShares also noted a decline in global digital asset investment product trading volumes to $11 billion for the week, significantly below the weekly average of $22 billion observed throughout the year.

As uncertainty surrounding economic policies and market conditions persists, investors are closely monitoring developments in both traditional and digital asset markets. The recent net outflows from U.S. spot Bitcoin ETFs reflect a cautious approach amidst fluctuating economic indicators and regulatory uncertainties. Analysts anticipate continued volatility in the coming weeks, influenced by global economic trends and regulatory actions affecting the cryptocurrency sector.