Ethereum funds lost $222 million last week, the largest digital asset outflow tracked by CoinShares. Total crypto fund outflows reached $414 million-marking the first weekly net negative in five weeks.
The sell-off followed concerns over the U.S. Clarity Act, a proposed crypto market structure bill. The legislation has drawn scrutiny for its potential impact on staked ETH products and yield-bearing stablecoins.
U.S. investors accounted for $445 million in outflows, while Switzerland saw minor $4 million withdrawals.
Circle, the issuer of USDC, saw its stock drop 25% amid speculation the bill could restrict yield programs. Although Circle doesn’t offer direct yield on USDC, it benefits from exchanges like Coinbase rewarding users for holding balances.
The broader market reaction was driven by similar factors affecting Bitcoin ETFs, including geopolitical tensions around Iran and fading hopes of a Federal Reserve rate cut.
Users on Myriad prediction platform now believe the Fed will not cut rates before July, with 91.5% confidence. Traders are 97.4% certain the FOMC will hold current rates at its April 28 meeting.