Cryptocurrency outflows are on the rise as investors bet against bitcoin
Date: 2023-09-12 Author: Karina Ziganova Categories: BLOCKCHAIN
The resurgence of bearish sentiment in cryptocurrency markets has continued for four weeks in a row. The exodus of investors from digital assets, combined with a sharp increase in interest in short positions in Bitcoin, is a clear example of this process.
Over the past week, outflows from cryptocurrency investment products amounted to $59 million. CoinShares reported this in its weekly report. This adds up to $294 million in outflows over the last 4 weeks, which is 0.9% of the sector's total assets under management (AUM).
At the same time, investors have invested heavily in short Bitcoin (BTC) investment products. According to CoinShares, these products saw the largest inflows since March. The inflow amounted to 15 million US dollars.
When considering the trading volume of crypto investment products, negative feelings become more pronounced. The data shows that trading volumes decreased significantly by 73% and amounted to $754 million compared to 2.8 billion last week.
Speaking about this trend, CoinShares analyst James Butterfill noted:
“Asset sentiment remains poor, reflecting the influx of short-term investment products. In our view, the most likely reasons are ongoing concerns about asset class regulation and the recent strength of the dollar.
Bitcoin leads to outflow
According to the report, Bitcoin was hit hardest last week by a $69 million money leak, bringing its monthly flows to $72.4 million.
BTC investment products have been in a bearish streak since the US Securities and Exchange Commission (SEC) delayed its decision on the avalanche of applications for wholesale exchange-traded funds ETFs. And while Grayscale's decisive victory revived hopes of SEC approval, investors remained cautious.
At the same time, other assets of this kind such as Ethereum (ETH) and Solana recorded an outflow of $4.8 million along with $1.1 million, respectively.
This outflow leads to the fact that ETH flows dropped to negative $108 million, accounting for 1.6% of assets under management. These two flow trends showed ETH to be the “least favorite digital asset among ETP investors this year.” This was announced by CoinShares.
But on the other hand, altcoins like XRP continue to see outflows. It was this week that the flow reached $700,000.
Of all countries, Germany was hit the hardest, followed by Canada and the United States. Germany recorded outflows of $20 million, while Canada and the United States recorded outflows of $17.6 million and $12.3 million, respectively.
