Crypto Funds Experience Outflows After 11-Week Run of Inflows
Crypto funds at asset managers such as CoinShares, Bitwise, Grayscale, ProShares, and 21Shares ended an 11-week run of inflows last week, with net outflows of $16 million, according to CoinShares’ latest report.
Bitcoin Dominates Outflows while Trading Activity Remains High
Bitcoin-based funds dominated the outflows, with $32.8 million leaving the market last week. Short Bitcoin investment products also saw $0.3 million in outflows. However, despite the outflows, trading activity remained above average at $3.6 billion compared to the yearly average of $1.6 billion.
Regional Flows Indicate Profit-Taking Rather Than Shift in Sentiment
The outflows appear to be driven by profit-taking rather than a change in sentiment towards cryptocurrencies. The U.S. and German markets experienced the largest outflows of $18.3 million and $9.7 million, respectively. In contrast, Switzerland saw inflows of $9.1 million, and Canada received $6.9 million in inflows.
Ether and Avalanche Witness Outflows While Solana, Cardano, and XRP Gain Inflows
Ether and Avalanche-based investment products saw outflows of $4.3 million and $1 million, respectively. On the other hand, Solana, Cardano, and XRP products bucked the trend and attracted inflows of $10.6 million, $3 million, and $2.7 million, respectively. Chainlink-based funds also experienced inflows of $2 million.
Positive Sentiment for Blockchain Equities Continues
In addition to cryptocurrencies, blockchain equities saw positive sentiment last week, with inflows totaling $122 million. This adds to a nine-week streak of inflows, reaching $294 million, which is the largest run to date.
Hot Take: Outflows in Crypto Funds Signal Profit-Taking
The recent outflows in crypto funds suggest that investors are taking profits after a prolonged period of inflows. While Bitcoin and Ether experienced outflows, other cryptocurrencies such as Solana, Cardano, and XRP attracted new investments. This indicates that there is still positive sentiment towards the asset class. Additionally, the continued inflows in blockchain equities demonstrate growing interest and confidence in the underlying technology. Overall, the crypto market remains dynamic and resilient despite short-term fluctuations.
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