Digital asset exchange-traded products and funds faced substantial outflows last week, shedding $600 million, the largest since March 22, according to a June 17 report by CoinShares.

The "Weekly Asset Fund Flows" report highlighted that the outflows were predominantly from Bitcoin investment vehicles, which saw an exodus of $621 million. In contrast, short Bitcoin funds experienced modest inflows of $1.8 million. The report attributed this capital flight to a more hawkish-than-expected stance from the Federal Reserve, which suggested maintaining high-interest rates. This outlook likely prompted investors to pull back from fixed-supply assets like Bitcoin.

Despite the bleak scenario for Bitcoin, altcoins showed resilience. Ether investment vehicles attracted $13.2 million in inflows, while LIDO and XRP investment products saw $2 million and $1.1 million respectively. Other altcoins, including BNB, Litecoin, Cardano, and Chainlink, also recorded small weekly inflows. However, these gains were insufficient, leading to a decline in total digital assets under management.

Despite initial enthusiasm following the launch of Bitcoin exchange-traded funds (ETFs) in the United States, many experts believe that institutional involvement is still nascent. Franklin Templeton CEO Jenny Johnson argued that institutional adoption is still in its infancy. She suggested that a more robust wave of institutional interest and capital deployment is likely to occur in a subsequent phase of investment.