Digital Assets Investment Products Experience Withdrawals, But Trading Activity Remains High
Last week, digital assets investment products saw withdrawals of $16 million, breaking their 11-week streak of positive cash flows. However, trading activity remained significantly higher than the yearly average, reaching $3.6 billion compared to the year-to-date average of $1.6 billion.
Bitcoin Witnesses Outflows, Altcoins Experience Inflows
Bitcoin was particularly affected, with outflows of $33 million. Short-bitcoin also experienced minor outflows of $0.3 million. In contrast, altcoins saw inflows of $21 million during the same period.
Solana, Cardano, XRP, and Chainlink Attract Inflows
According to CoinShares’ latest report, altcoins such as Solana, Cardano, XRP, and Chainlink were the primary beneficiaries of inflows. Solana attracted $10.6 million, Cardano received $3 million, XRP saw inflows of $2.7 million, and Chainlink had inflows of $2 million.
Ethereum and Avalanche Experience Modest Declines
On the other hand, Ethereum and Avalanche experienced modest declines. Ethereum had outflows of $4.4 million while Avalanche saw outflows of $1 million.
Sentiment Towards Blockchain Equities Remains Strong
Sentiment towards blockchain equities remained strong with substantial inflows totaling $122 million last week. This marked the most significant consecutive run on record over the past nine weeks, bringing the total to $294 million.
Geographical Distribution: Outflows Concentrated in the United States
The majority of outflows were concentrated in the United States, with withdrawals amounting to $18 million. Germany also saw marginal outflows of $10 million. However, Canada and Switzerland experienced inflows of $6.9 million and $9.1 million, respectively.
Profit-Taking Likely the Main Driver
The diverse pattern of regional flows suggests that the withdrawals were likely driven more by profit-taking rather than a shift in sentiment towards the asset class.
“The mixed regional flows suggest this was more related to profit-taking rather than a turn in sentiment towards the asset class.”
Hot Take: Digital Assets Investment Products Experience Withdrawals, but Trading Activity Remains High
Last week, digital assets investment products broke their 11-week streak of positive cash flows with withdrawals amounting to $16 million. However, trading activity remained significantly higher than the yearly average. While Bitcoin witnessed outflows, altcoins experienced inflows, with Solana, Cardano, XRP, and Chainlink being the primary beneficiaries. Ethereum and Avalanche saw modest declines. On a positive note, sentiment towards blockchain equities remained strong. Geographically, the United States had the most significant outflows, while Canada and Switzerland saw inflows. Overall, it appears that profit-taking played a larger role in the withdrawals than a shift in sentiment towards the asset class.
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