Investment Crypto Products Experience $21 Million Outflows
Last week, investment crypto products saw outflows of $21 million, according to a report by CoinShares. Although this figure seems modest, it doesn’t reflect the high trading volumes of Bitcoin (BTC) during the same period. BTC trading volumes reached $11.8 billion, which is seven times higher than the average weekly volume in 2023.
Geographical Trends: Inflows to the US, Outflows from Canada and Europe
The report also highlights the geographical distribution of capital inflows and outflows. The United States received inflows totaling $263 million, while Canada and Europe experienced outflows of $297 million. Analysts suggest that this trend is driven by the migration of assets to the US.
Bitcoin Product Outflows and Dominance of ETP Activity
Bitcoin product outflows were relatively minor at $25 million. However, the trading volumes for BTC reached $11.8 billion, accounting for 63% of all BTC volumes on trusted exchanges. Ethereum (ETH) and Solana (SOL) also experienced outflows of $14 million and $8.5 million, respectively.
The report emphasizes that exchange-traded product (ETP) activity currently dominates overall trading activity. Incumbent issuers with higher costs have been negatively affected in the US, with capital outflows amounting to $2.9 billion since the launch of spot Bitcoin ETFs.
Newly Issued ETFs Gain Momentum
Despite the outflows, newly issued ETFs have gained momentum and attracted $4.13 billion in investments, surpassing losses from more expensive existing ETPs. The recent price decline has also presented an opportunity for investors to add to short Bitcoin investment products, resulting in an influx of $13 million. Since their launch, US ETFs have received net inflows of $1.2 billion.
Predictions and Expectations
Chris Jay Terry, a senior IT architect at BTCData, predicts that the largest spot Bitcoin ETF, GBTC, will experience an outflow of another $25 billion. After just six days of trading, the net outflow from GBTC already amounted to $2.8 billion. Experts from JPMorgan Chase bank expect the fund to lose approximately $13 billion, with investors transferring $10 billion to other products in the same sector.
Hot Take: Investment Crypto Products Experience Moderate Outflows Amidst High BTC Trading Volumes
Last week’s report by CoinShares reveals that investment crypto products saw outflows of $21 million. However, this figure doesn’t capture the significant trading volumes of Bitcoin, which reached $11.8 billion. Geographically, the United States attracted inflows while Canada and Europe experienced outflows. Bitcoin product outflows were relatively minor compared to Ethereum and Solana. ETP activity dominates overall trading activity, affecting incumbent issuers with higher costs. Despite this, newly issued ETFs have gained momentum and surpassed losses from existing ETPs. The recent price decline has also led to an influx of investments in short Bitcoin products. Predictions suggest further outflows from the largest spot Bitcoin ETF, GBTC.
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