The recent hawkish stance of the Federal Reserve has led to a significant sell-off in Bitcoin, resulting in substantial outflows from digital asset investment products. According to a report from CoinShares, a total of $620 million was withdrawn from these products last week, with Bitcoin leading the way with $621 million in outflows.

The report highlights that outflows from US spot Bitcoin ETFs were the primary contributor to this trend, with Grayscale's GBTC ETF experiencing the largest outflows at $274.3 million. Ark Invest's ARKB and Fidelity's FBTC also saw significant outflows, while BlackRock's IBIT was the only spot Bitcoin ETF to record net inflows.

The total net inflows in spot Bitcoin ETFs since inception dropped to $15.1 billion, ending a streak of 19 consecutive days of heavy inflows that brought in over $4 billion. The outflows were particularly pronounced in the three days surrounding the FOMC meeting, with $200 million per day leaving the ETFs.

The bearish sentiment in the market was reflected in the price of Bitcoin, which ended the week 7% lower. The total assets under management (AuM) fell from above $100 billion to $94 billion, and trading volumes dropped to $11 billion, well below the average $22 billion seen this year.

Regional trends also showed a majority of outflows in the US, with Canada, Switzerland, and Sweden also experiencing outflows. However, Germany was an exception, with inflows of $17 million. The report concludes that these outflows and recent price sell-off have led to a significant decline in the overall sentiment in the digital asset market.