Outflows from Crypto Exchange-Traded Products Reach $455 Million
According to a report from asset manager CoinShares, outflows from crypto exchange-traded products (ETPs) have reached $455 million over the past nine weeks. When shares of these funds fall below their target prices, they sell off cryptocurrencies, leading to outflows. This indicates a negative sentiment towards cryptocurrencies.
Bitcoin Dominates Outflows
Last week, there were outflows of $54 million, making it the eighth out of the last nine weeks to experience outflows. Bitcoin accounted for 85% of all outflows from ETPs, with over $45 million worth of Bitcoin sold into the market by ETPs. Ether funds also saw outflows of approximately $5 million during the same period.
Altcoins Show Some Resilience
Despite the overall outflows, certain ETPs representing altcoins performed well. Solana (SOL) ETPs saw net inflows of $700,000, Cardano (ADA) gained $430,000, and XRP (XRP) added $130,000.
Regional Origin of Outflows
The United States was responsible for 77% of the outflows from crypto ETPs. Germany, Canada, and Sweden also contributed significantly to the outflow volume.
Challenges for Crypto ETPs in the US
Crypto ETPs offer a convenient way for traditional investors to access digital assets. However, the issuance of a spot Bitcoin exchange-traded fund has faced regulatory and legal barriers in the United States. The Securities and Exchange Commission (SEC) denied VanEck’s proposal for a Bitcoin Trust in March, and a federal appeals court ruled against the SEC’s denial of a Bitcoin ETP proposal from Grayscale in August.
Hot Take: Negative Sentiment Persists as Crypto ETP Outflows Continue
The recent report from CoinShares highlights the persistent negative sentiment towards cryptocurrencies, as outflows from crypto exchange-traded products have reached $455 million over the past nine weeks. Bitcoin remains the dominant contributor to these outflows, with Ether also experiencing significant selling pressure. However, some altcoins have shown resilience, attracting net inflows. The United States accounts for the majority of these outflows, indicating ongoing challenges for crypto ETPs in the country. Despite the obstacles, crypto ETPs remain an attractive option for traditional investors looking to enter the digital asset market.
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