The ongoing bitcoin halving worries have resulted in a continuous outflow of funds from equity markets tied to the blockchain, for eleven weeks in a row.
Based on information from CoinShares, there were withdrawals totaling $9 million from blockchain stock investments. This was due to investor concerns over how the upcoming Bitcoin halving event might negatively impact mining companies. In turn, this worry could decrease the profitability and lower the value of investors’ holdings in these firms.
Recently, the mining reward decreased from 6.25 to 3.125 Bitcoins following the latest halving event. If this decrease in rewards makes mining less financially viable, it may result in lower revenues and potential financial hardships for mining businesses. Such difficulties could potentially impact the value of the corresponding companies’ stocks.
Interest Wanes in Digital Asset Investments
For the second week in a row, there were withdrawals amounting to $206 million from digital asset investment products. According to CoinShares, trading activity in Bitcoin ETPs dropped slightly to $18 billion, making up a smaller percentage of overall Bitcoin trading transactions. This proportion currently stands at 28%, down from the 55% seen a month prior.
An Singaporean investment firm’s analysis indicates a decrease in interest from Exchange-Traded Product (ETP) and Exchange-Traded Fund (ETF) investors. This may be because it’s believed the Federal Reserve will keep interest rates elevated for a more extended timeframe than previously thought.
After a net withdrawal of $192 million from Bitcoin investments, many investors chose not to capitalize on this trend by short-selling. Conversely, the value of short positions in Bitcoin decreased slightly by $0.3 million. Similarly, Ethereum-linked investment products experienced withdrawals amounting to $34 million, representing their sixth consecutive week with outflows.
In the world of Solana investment goods, there was a notable decrease in the amount invested, to the tune of $0.3 million over the past week. Conversely, there was a surge of interest in multi-asset investments, resulting in an addition of $9 million during the same time frame.
During this time, Litecoin and Chainlink attracted investment amounts of $3.2 million and $1.7 million respectively. Following them were Polkadot and XRP, which gained investments of $1.5 million and $1.3 million each.
Negative Sentiment Hits US ETFs
In different parts of the world, there was primarily a negative attitude towards US Exchange-Traded Funds (ETFs), resulting in withdrawals totaling $244 million. A significant portion of these withdrawals came from established ETFs, while new ETFs still attracted investments, but at much smaller rates than before. Additionally, Germany reported outflows worth $8 million, and Sweden experienced outflows amounting to $6.7 million during the previous week.
In contrast, Canada and Switzerland led the way in new investments last week with $30 million and $8 million, while Brazil, Australia, and France saw smaller inflows amounting to $5.5 million, $2.2 million, and $0.2 million respectively.
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2024-04-23 01:08