Crypto Funds Experience Significant Outflows, Bitcoin and Ethereum Hit Hard
Last week, there was a notable trend as crypto funds, including those holding Bitcoin, faced significant outflows, causing concerns among investors. This decline in digital asset investment products has been ongoing for five consecutive weeks. In the past week alone, outflows amounted to $53.5 million, resulting in nearly half a billion in aggregate outflows over the past nine weeks.
Bitcoin (BTC) Takes the Biggest Hit
The outflows primarily affected Bitcoin (BTC), often referred to as the “king of cryptocurrency.” Approximately 85% of the outflows were from Bitcoin funds, resulting in a decrease of $45 million last week.
This occurred while Bitcoin was struggling to recover from previous losses. The cryptocurrency started the week at just over $25,000 and ended above $26,000 by Saturday. As of now, Bitcoin is trading at $27,117, reflecting an 8.3% increase over the past seven days.
Ethereum and Other Assets Also See Outflows
Ethereum (ETH) didn’t escape the outflows either. Despite its appealing investment fundamentals and growing demand for staking yield, Ethereum saw outflows amounting to $4.8 million. Other assets like BNB and MATIC also experienced minor outflows.
U.S. Plays a Major Role in Negative Sentiment
The report suggests that the United States was primarily responsible for this negative sentiment, accounting for 77% of the outflows. Other regions such as Germany, Canada, and Sweden also saw significant outflows during the past week.
Year-to-Date Inflows Plummet
As a result of this outflow trend, year-to-date net inflows have dropped to a mere $51 million. This revelation is concerning given the optimistic start to 2023.
Solana, Cardano, and XRP Show Resilience
Despite the overall challenging market, Solana, Cardano, and XRP stood out with inflows. Solana led the way with $700,000 in inflows, followed by Cardano with $400,000 and XRP with $100,000. Their performance offers a glimmer of optimism and indicates pockets of resilience and investor confidence.
Increased Trading Volume Indicates Active Participation
While blockchain equities also experienced outflows for the sixth consecutive week, there was a significant surge in trading volume. Trading volume increased by 42%, rising from $754 million to $1 billion compared to the previous week. This indicates active participation and engagement of traders in the crypto sphere.
Hot Take: Mixed Fortunes for Crypto Funds as Outflows Continue
Last week saw crypto funds facing significant outflows, causing concerns among investors. Bitcoin and Ethereum were hit hard, experiencing substantial outflows. However, amidst this challenging market environment, assets like Solana, Cardano, and XRP showed resilience with inflows. The United States played a major role in the negative sentiment, accounting for most of the outflows. Year-to-date net inflows plummeted to a meager $51 million. Despite these challenges, increased trading volume suggests active participation in the crypto sphere. Overall, it was a mixed week for crypto funds as some assets faced outflows while others demonstrated strength.
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