Crypto Investment Products See Outflows Following Market Crash
Last week, crypto investment products at asset managers such as Grayscale, Bitwise, and ProShares experienced outflows of $55 million, reversing the previous week’s inflows of $28.5 million. This change in fortunes was attributed to the crypto market crash, which saw bitcoin and ether both drop around 10% and 15%, respectively. The sentiment surrounding spot bitcoin ETF approvals not being imminent also played a role in the outflows. Additionally, the anticipated decision in the Grayscale Investments case regarding the conversion of the GBTC product into a spot bitcoin ETF did not come to fruition.
Main breakdown of key points:
- Bitcoin led the outflows, with $42 million leaving the market.
- Ether, Polygon, Litecoin, and Polkadot investment products also saw outflows.
- XRP products, on the other hand, continued to see inflows, adding $1.2 million.
- Canada and Germany experienced the highest outflows, while Switzerland had minor inflows.
- Market volumes for crypto spot and derivatives have dropped after the crash.
According to CoinShares Head of Research James Butterfill, market volumes remain below average, leaving prices vulnerable to large trades. The panic last week resulted in a 10% decline in total assets under management, settling at $32.3 billion at the end of the week.
Hot Take
The recent market crash and subsequent outflows from crypto investment products highlight the volatility and risks associated with the crypto market. It also emphasizes the importance of keeping a close eye on market sentiment and regulatory developments. As the market continues to mature, investors need to carefully consider their investment strategies and stay informed about the latest trends and events in the crypto space.
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