Dissecting The Crypto Outflow Trend
The past week has seen a net outflow of $9 million from crypto funds, continuing a trend that has persisted for the past ten weeks. This brings the total outflow to around $464 million, according to CoinShares’ latest report on digital asset fund flows.
Major players in digital asset management, including CoinShares, Grayscale, 21Shares, Bitwise, and ProShares, have all been affected by this ongoing trend. Although the outflows have decreased from the previous week’s $54 million, they still contribute to the overall movement of capital away from these products over the past ten weeks.
A closer look at the report reveals that this trend is not consistent across regions. Europe has managed to resist the outflow wave, recording inflows of $16 million. According to James Butterfill, Research Head at CoinShares, this regional divergence can be attributed to different reactions to the regulatory environment. European investors view recent regulatory disappointments as an opportunity, while their US counterparts have withdrawn $14 million due to recent events.
In addition to capital outflows, trading volumes in crypto funds have also reflected caution. The volume dropped from over $1 billion in the previous week to $820 million, significantly lower than the yearly average of $1.3 billion.
Not All Assets Feel The Pinch
Bitcoin has experienced outflows for three consecutive weeks, with a decline of $6 million in just the past week. Interestingly, Short-Bitcoin products have also seen outflows of $2.8 million. This suggests that investors may be unwinding their bearish bets on Bitcoin.
Ethereum has also been impacted by this trend, with outflows recorded for six consecutive weeks and a recent reduction of $2.2 million.
However, amidst the broader market negativity, altcoins XRP and Solana have shown resilience. This week, XRP saw inflows of $660,000, while Solana received $310,000 in inflows. This is not the first time these two altcoins have stood out during a downturn.
Last week, both assets experienced significant inflows. Solana led the way with $700,000, followed by Cardano and XRP with inflows of $400,000 and $100,000 respectively. According to the report, this suggests that some investors are adopting a selective and value-driven approach to the altcoin market.
Despite the positive inflows, both XRP and Solana are still affected by the overall crypto market downturn. XRP is down 1.5% in the past day with a current price of $0.50, while Solana has seen a slight 0.5% upward move over the same period with a trading price of $19.60 at the time of writing.
Hot Take: Crypto Outflows Continue Amidst Altcoin Resilience
The crypto market has witnessed continuous outflows from investment products for the sixth consecutive week. While major cryptocurrencies like Bitcoin and Ethereum have experienced outflows, some altcoins such as XRP and Solana have shown resilience by attracting inflows. This suggests that investors are taking a selective approach and finding value in certain altcoins despite the broader market sentiment.
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