As an analyst with a background in digital asset investment, I’ve seen my fair share of market fluctuations. The recent news that digital asset investment products experienced consecutive weeks of outflows, shedding a total of $1.2 billion, is a trend that has become all too familiar. According to the latest report from CoinShares, this potential outflow could be due to investor pessimism regarding possible Fed interest rate cuts this year.
Last week, digital asset investment funds saw a loss of approximately $1.2 billion, marking the second successive week with withdrawals. This equates to a total of around $584 million being taken out.
As an analyst, I would interpret CoinShares’ findings as indicating that investor uncertainty around anticipated Fed interest rate reductions in 2023 might be contributing to this trend.
Altcoins See Inflows Amid Market Weakness
In the most recent CoinShares’ “Digital Asset Fund Flows Weekly Report,” it was noted that Bitcoin experienced substantial outflows totaling $630 million, making it the principal focus with relatively minor growth in short positions.
“Further outflows of US$584m highlight a true correction is underway.”
This quarter, Ethereum has witnessed heightened investor attention, but it wasn’t immune to the prevailing bearish market sentiment. Consequently, there were $58 million in withdrawals from Ethereum-linked investment vehicles during the last week. Remarkably, certain altcoins managed to gain an edge amidst recent price downturns. Notable among these were Solana, Litecoin, and Polygon investment products, which saw inflows of $2.7 million, $1.3 million, and $1 million respectively.
In that time frame, XRP and Chainlink investment products experienced relatively small inflows of approximately $0.7 million and $0.3 million each.
As a crypto investor following Europe‘s investment scene, I’ve observed a noteworthy trend. Despite the recent downturn in altcoins, investors have been pouring $98 million weekly into multi-asset products. This behavior indicates that some market participants are seizing the opportunity to diversify their crypto investments at lower prices.
Switzerland and Brazil Emerge as Outliers
Last week saw a downturn in cryptocurrency Exchange-Traded Product (ETP) trading, with a global volume of merely $6.9 billion recorded – the smallest amount since the introduction of spot Bitcoin ETFs in January 2023. The US took the lead in withdrawals, accounting for $475 million, while Canada reported weekly outflows totaling $109 million.
As a crypto investor, I’ve observed that Germany and Hong Kong saw significant outflows last week, with $24 million and $19 million being withdrawn from their respective crypto markets. Sweden experienced modest outflows, with approximately $5.3 million being taken out.
In contrast to most countries that experienced outflows, Switzerland and Brazil saw positive trends with inflows of $39 million and $48.5 million respectively.
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2024-06-24 21:52