Investors Exhibit Hesitancy Amidst Stalled Price Momentum in Digital Asset Investment Products 📉
Investors in digital asset investment products witnessed minor outflows totaling $126 million in the past week. Despite a slight increase in trading volumes from $17 billion to $21 billion on a week-on-week basis, activity in exchange-traded products (ETPs) and exchange-traded funds (ETFs) dropped relative to the overall market, according to a recent CoinShares report. ETP/ETF activity accounted for 40% of total volumes on trusted exchanges over the past month but decreased to 31% last week, indicating a cautious approach adopted by investors.
Bitcoin Outflows and Altcoin Inflows 📉📈
The report revealed that Bitcoin experienced outflows of $110 million but maintained positive inflows of $555 million month-to-date. Short-bitcoin, which had been witnessing outflows for the past three weeks, saw minor inflows of $1.7 million, likely capitalizing on the recent price weakness. On a relative basis, Ethereum suffered the most, with outflows of $29 million last week, marking its fifth consecutive week of outflows. However, altcoins had a successful week, with several lesser-known names attracting inflows, including Decentraland, Basic Attention Token, and LIDO, with inflows of $4.9 million, $2.9 million, and $1.8 million, respectively.
Regional Sentiment and Market Conditions 🌍
- The United States recorded the largest outflows, totaling $145 million, followed by Switzerland and Canada with outflows of $5.7 million and $6 million, respectively.
- Conversely, investors in Germany viewed recent price weakness as an opportunity and injected $29 million in inflows last week.
- The cautious sentiment among investors reflects their wariness of the current market conditions and the uncertain trajectory of digital assets.
Significant Bitcoin Surge and Hong Kong Spot ETFs Approval 💹
Bitcoin experienced a 2.8% surge over a 24-hour period, reaching a trading value above $66,500, while ether (ETH) advanced to $3,240 after multiple issuers in Hong Kong announced that they received approval for spot crypto ETFs. China Asset Management, Bosera Capital, and other applicants shared the news of their approval to list spot Bitcoin and Ether ETFs in Hong Kong on the social media platform WeChat (Weixin). Analysts predict that mainland Chinese investors could pour $25 billion into potential Hong Kong-listed spot Bitcoin ETFs through the Southbound Stock Connect program, allowing qualified mainland Chinese investors to access eligible shares listed in Hong Kong.
Potential Bitcoin Miner Outflows Post-Halving Event ⛏️
Notable outflows of Bitcoin from miners could be on the horizon in the months following the upcoming halving event. Markus Thielen, the head of research at 10x Research, estimated that Bitcoin miners have the potential to liquidate approximately $5 billion worth of BTC after the halving, leading to a potential sideways movement in Bitcoin’s price for four to six months, similar to past halving cycles.
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