By Gertrude Chavez-Dreyfuss

NEW YORK (Reuters] – Cryptocurrency funds and products had record outflows last Monday of $207 Million, according to CoinShares’ report. Prices continued their slide during the first week of this year.

Since mid-December the sector experienced four weeks consecutive outflows, totaling $465million, 0.8% of its total assets.

One of the largest cryptos in the world in terms of market capitalization (XRP) posted $107 million outflows in the week up to January 7.

James Butterfill, CoinShares’ investment strategist said that the outflows were “directly responding to FOMC minutes” which showed the U.S. Federal Reserve’s concern about rising inflation and investors’ fear of an increase in interest rates.

Because of increased volatility and tighter liquidity, Fed policy tightening can be a problem for risk assets like cryptocurrency.

Coinshares has noted that investor activity is higher than average over the past 4 weeks.

Bitcoin has lost nearly 10% since the beginning of the year against the U.S. Dollar. It fell below $40,000 Monday for the first time since September 20,21.

According to Blockchain data provider Glassnode’s latest research report, Monday’s “a phase of heavy loss realization has followed (in bitcoin) the Dec. 4-flush-out”.

It added that “in the weeks since, the onchain behavior was more heavily dominated HODLer class (long-term holders), with very little activity from newer market participants.”

Last week’s outflows from Ethereum-based products were $39 million. This is five consecutive weeks of outflows totaling $200 million. CoinShares stated that’s outflows were proportional to total AUM and higher than bitcoin.

With outflows totaling $10 million, blockchain-linked equity investments products were not immune to negative sentiment.

Grayscale’s assets under management and CoinShares’s asset-management business, which are two of the largest global digital asset managers, have fallen to $4.3 billion and $38.2 million, respectively, from highs.